US stocks rally on Iran deal hopes; oil slides
US stocks surged to their best day in two months after President Trump called off a threat to bomb Iran, raising hopes for a deal that could restore global oil flows and sending crude prices lower.
U.S. stocks rallied to their best day in two months on Thursday, while oil prices fell sharply after President Donald Trump called off his threat to bomb Iran. The move raised hopes for a potential diplomatic resolution that could restore the global flow of oil, sending crude prices lower.
The S&P 500 jumped 1.8%, recovering from a back-to-back drop that had pulled it back to early May levels. The Dow Jones Industrial Average surged 1.9%, gaining 929.97 points to close at 50,848.75. The Nasdaq composite rallied 2.5%, adding 640.16 points to finish at 25,809.66. The Russell 2000 index of smaller companies also rose, gaining 85.5 points. Strong gains in chip stocks helped offset a slide in Oracle shares.
For energy traders, the development is significant because it removes an immediate geopolitical risk premium from crude prices. The threat of a U.S.-Iran military confrontation had been supporting oil prices, and its removal could lead to increased supply expectations. Traders should monitor NowPrice's real-time fuel quotes for the latest price levels as the situation evolves. The potential for a deal could also weigh on crude further if sanctions are eased, allowing more Iranian oil to enter the market.
Looking ahead, investors will focus on any official statements from the White House or Iranian authorities regarding negotiations. Key data releases next week include U.S. crude inventory figures from the Energy Information Administration, which will provide further clues on supply-demand dynamics. Additionally, the upcoming OPEC+ meeting will be closely watched for any production policy changes in response to shifting geopolitical conditions.