Investing.com — U.S. stocks soared on Monday, bouncing back strongly from a bruising week as Middle East de-escalation hopes swept across markets. President Donald Trump said the U.S. and Iran had held “productive” talks and that there was a “very serious chance of making a deal.”
At 11:51 ET (15:51 GMT), the benchmark S&P 500 index was up 1.7% to 6,616.65 points, the tech-heavy added 1.8% to 22,030.97 points, and the blue-chip gained 2% to 46,475.99 points.
Trump touts Iran talks, Tehran reportedly denies
In a social media post, Trump said that the talks over the last two days about arranging a “complete and total resolution” to hostilities were “productive.”
“Based on the tenor and tone of these” conversations, which will continue throughout the week, Trump said he had instructed the Pentagon to “postpone any and all military strikes” against Iranian power plants and energy infrastructure for five days.
However, Iranian state media said Tehran has had no direct discussions with the U.S. Iran’s foreign ministry spokesperson dismissed claims of any talks and said the country’s position on the Strait of Hormuz and the “prerequisites for ending the war remains exactly as before,” state media said.
According to the Wall Street Journal, Iran’s Fars news agency reported that there are no direct or indirect communications with the U.S. Fars added that Trump has backed down on targeting Iranian power plants following Iranian threats to retaliate with strikes on similar sites in West Asia.
“We have had very, very strong talks. We’ll see where they lead. We have major points of agreement … They went, I would say perfectly,” Trump later told reporters outside Air Force One.
“We have a very serious chance of making a deal. That doesn’t guarantee anything … We are in the throes of a real possibility of making a deal … But again, I’m not guaranteeing anything,” the president added.
Trump said he wants to “see no nuclear bomb” when asked what the goal of the latest talks were. He said the U.S. is speaking with “a top person in Iran,” but clarified it was not Iran’s Supreme Leader, Mojtaba Khamenei.
“Keep in mind that even if fighting ended right now, the economic fallout from the last several weeks will still be substantial, but at least now there is a line of sight toward resolution,” the Vital Knowledge analysts said.
Trump predicts oil prices will ’drop like a rock’
Trump had previously threatened to hit Iran’s energy infrastructure and power plants with fresh strikes if Tehran did not reopen the Strait of Hormuz by Monday night. The strait, a narrow waterway south of Iran through which one-fifth of the world’s shipping passes, has become a crucial flashpoint in the conflict.
The specter of Iranian strikes on vessels attempting to traverse the strait has effectively brought traffic to a standstill, depriving countries around the world of key energy imports and darkening the outlook for the global economy. Worries have abounded that inflation shocks brought on by a sharp climb in oil prices would weigh on growth and lead to renewed interest rate hikes by central banks.
Trump on Monday predicted that oil prices would “drop like a rock” as soon as an agreement with Iran was reached. His administration has taken several steps in order to mitigate oil prices, including temporarily lifting sanctions on Iranian oil at sea.
“I just want to have as much oil in the system as possible … you have ships that are out there that are loaded up with oil. Rather than keep it there, I would rather see it go to the system. Any small amount of money that Iran gets is not going to have any difference in this war,” Trump told reporters.
Trump said the Strait of Hormuz will be “jointly controlled” and will reopen “very soon if it works,” though he stopped short of offering guarantees.
Oil prices slumped on the Middle East de-escalation hopes. Brent oil futures — the global benchmark — were last down 7.7% to $98.21 a barrel. Meanwhile, U.S. West Texas Intermediate crude futures fell 7.8% to $90.55 a barrel.
Ambar Warrick and Scott Kanowsky contributed to this article