Global markets rebound after Trump signals possible talks with Tehran

The main U.S. indexes climbed in broad gains on Monday after ​President Donald Trump said he had ordered the military to postpone strikes against Iranian power plants following “productive conversations” with Tehran.

Iran’s foreign ministry ‌refuted the claim, with a spokesperson saying they had held no discussions with the United States and that their conditions to end the war had not changed. A source told Reuters Israeli officials believed the U.S. and Iran could hold talks this week.

Global markets staged a sharp recovery after Trump’s comments, with Europe’s STOXX 600 and precious ​metals edging up while oil prices fell, signaling improving risk appetite. They had been trading lower after threats of attacks on Israeli and ​Iranian power networks.

“It (the comments) buys time. We are in a very intense conflict… maybe they need some ⁠more time to prepare whatever they’re staging to do. I don’t see this conflict going back in the bottle overnight,” said David ​Bianco, Americas chief investment officer at DWS.

Investors trimmed bets on interest-rate hikes from the U.S. Federal Reserve following Trump’s comments, which now ​stand at 24% for a cut in December, compared with more than 50% earlier, according to CME Group’s FedWatch.

Markets had scaled back bets last week to show no easing was expected in 2026 after the central bank struck a hawkish tone, projecting higher inflation and a single reduction this year.

“The Fed is stuck ​where they are for a while longer. Conflict is inflationary, but you don’t hike when your country’s in the middle of a ​deep, escalating conflict,” said Bianco.

At 11:43 a.m. ET, the Dow Jones Industrial Average rose 888.09 points, or 1.95%, to 46,465.56, the S&P 500 added 108.40 points, or 1.67%, ‌to ⁠6,614.88, and the Nasdaq Composite  gained 399.63 points, or 1.85%, to 22,047.64.

All three indexes were set for their biggest single-day jumps since February 6.

The Russell 2000 gained 2.9%. The small-cap index, sensitive to higher interest rates, on Friday ended more than 10% below its record close of January 22, confirming it had been in correction territory.

The CBOE Volatility Index, Wall Street’s fear gauge – retreated after earlier hitting its highest level in two weeks – and was last down 1.82 points at 24.96.

Oil prices fell ​by more than 10%, but energy ​stocks were mixed. The energy ⁠index  was up 0.6%, in line with broader markets.

Airlines jumped, with American Airlines and United Airlines adding more than 5% each. Cruise ship operators soared, with Carnival Corp, Norwegian Cruise Lines and Viking ​Holdings all gaining more than 7%.

S&P 500 Consumer discretionary stocks rose 3%.

Banks, which had sold off sharply ​during the conflict, ⁠inched up, with JPMorgan Chase and Goldman Sachs adding 1.7% and 3%, respectively. The S&P 500 Banking index  gained 1.8%.

Investors will look forward to Fed speakers, business activity surveys and consumer sentiment readings this week.

In individual stocks, Synopsys gained 3.7% after activist investor Elliott Investment Management built a ⁠multibillion-dollar investment ​in the electronic design automation firm.

Advancing issues outnumbered decliners by a 4.9-to-1 ratio ​on the NYSE, and by a 3.12-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and five new lows, while the Nasdaq Composite recorded 28 ​new highs and 109 new lows.