Oil Prices Plummet, Wall Street Rallies After Trump Announces Iran Strike Reprieve

Oil prices plummeted on Monday after President Donald Trump announced he would hold off on new strikes against Iran at the urging of allies in the region. As a result, US stock indexes rallied, with the S&P 500 rising 1.2% and the Dow Jones Industrial Average up 569 points or 1.1%. The Nasdaq composite also jumped 1.8%.

The drop in oil prices helped ease concerns about inflation, which had been weighing on Wall Street's worries that inflation could get even worse. Brent crude sank 4.9% to $83.59, a significant decline from its recent highs of between $72 and $102 last month. The Treasury yield also fell to 4.68% from 4.75%, well above its pre-Iran war level of 3.97%.

Airlines and companies with big fuel bills led the market gains, with United Airlines rising 6.7% and American Airlines climbing 6.7%. Norwegian Cruise Line Holdings also surged 3.1%. Tyson Foods reported a slightly stronger profit for the spring than analysts expected, driving its stock up 3%.

However, sharp swings continued to roil beneath the surface of the market, with computer chip stocks veering up and down on worries about the sustainability of their surging revenues due to the artificial-intelligence boom. Micron Technology's stock swung from a drop of 6.4% to a gain of 0.7% during Monday's first 90 minutes of trading.