Plunging Crude Oil Prices May Lead To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to extend the upward move seen to close out the previous week.

The upward momentum on Wall Street comes as crude oil prices are plummeting amid renewed optimism about an end to the conflict in the Middle East.

U.S. crude oil futures are plunging by nearly 7 percent after President Donald Trump said in a post on Truth Social that he had canceled a planned attack on Iran.

“We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,” Trump said. “This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.”

He added, “Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL.”

Buying interest may be somewhat subdued, however, as past moves by the U.S. and Iran to halt attacks have been relatively short-lived.

Traders may also be reluctant to make more significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

Stocks showed a lack of direction early in the session on Friday after failing to sustain an initial advance but moved mostly higher over the course of the trading day. The major averages all moved to the upside, adding to the strong gains posted during Thursday’s session.

The major averages pulled back off their highs going into the end of the day but remained firmly positive. The Nasdaq jumped 251.68 points or 1 percent to 25,373.85, the S&P 500 advanced 52.09 points or 0.7 percent to 7,489.72 and the Dow climbed 276.97 points or 0.5 percent to 52,485.03.

For the week, the Nasdaq surged by 1.5 percent, while the S&P 500 and the Dow both shot up by more than 1 percent.

The strength that re-emerged on Wall Street came amid a sharp increase by shares of Amazon (AMZN), with the online retail giant soaring by 15.3 percent to a two-month closing high.

Amazon skyrocketed after the company reported better-than-expected second quarter revenue and cloud growth.

Buying interest may also have been generated in reaction to crude oil prices pulling back off their highs after an initial spike.

While U.S. crude oil futures jumped by more than 1 percent, prices had surged by more than 3 percent earlier in the day after Iran claimed it attacked two tankers transiting the Strait of Hormuz under U.S. military escort.

Meanwhile, traders shrugged a surge by treasury yields even as the ten-year yield bounced back to its highest levels since early 2025.

Yields jumped in reaction to the sharp increase in crude oil prices as well as comments from two of the three Federal Reserve officials that voted to raise interest rates by a quarter point at the monetary policy meeting earlier this week.

In a statement explaining his vote, Minneapolis Fed President Tushar Kashkari noted that inflation has been elevated relative to the central bank’s 2 percent target for more than five years.

“If inflation remains elevated, in my view, a potential series of small policy moves would be better than waiting and eventually concluding that even bolder actions were necessary,” Kashkari said.

He added, “On the other hand, if inflation durably fades, a strategy of small policy steps would allow the FOMC to slow or pause subsequent adjustments without unnecessary impact on the real economy.”

Cleveland Fed President Beth Hammack argued in a separate statement that now is the time for the Fed to act to speed the return of inflation to 2 percent.

“The longer that high inflation persists, the more challenging and costly it can be to bring it back down,” Hammack said. “I preferred to move at our recent meeting because I did not see the current policy stance as appropriately restrictive.”

With Amazon leading the way higher, retail stocks showed a substantial move to the upside on the day, driving the Dow Jones U.S. Retail Index up by 6.6 percent to a two-month closing high.

Oil service stocks also turned in a strong performance amid the jump in crude oil prices, resulting in a 2.5 surge by the Philadelphia Oil Service Index.

Significant strength also emerged among networking stocks, as reflected by the 2.2 percent gain posted by the NYSE Arca Networking Index.

On the other hand, gold stocks moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Biotechnology Index down by 3.2 percent.

Biotechnology stocks also saw considerable weakness on the day, with the NYSE Arca Biotechnology Index plunging by 2.9 percent.

Commodity, Currency Markets

Crude oil futures are plummeting $5.72 to $78.95 a barrel after jumping $1.08 to $84.67 a barrel last Friday. Meanwhile, after slumping $53.60 to $4,107 an ounce in the previous session, gold futures are edging down $2.80 to $4,104.20 an ounce.

On the currency front, the U.S. dollar is trading at 156.86 yen versus the 157.57 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1524 compared to last Friday’s $1.1526.

Asia

Asian stocks ended mixed on Monday as heavyweight semiconductor and artificial intelligence-related shares faced selling pressure after Friday’s record gains.

Brent crude prices fell about 5 percent, bond yields dipped and the U.S. dollar index slipped below the 100-point threshold after U.S. President Donald Trump held off on a fresh attack on Iran and said an agreement was close, signaling renewed diplomatic momentum.

Gold ticked higher and held above $4,050 an ounce amid easing inflationary concerns.

Ahead of the resumption of peace talks, Trump said a planned large-scale military strike on Iran was called off on the condition that efforts to quickly reach an agreement to reopen the Strait of Hormuz and resolve the impasse over Tehran’s nuclear capabilities move forward.

The yen surged against the dollar after Japan and the United States conducted coordinated yen-buying intervention and vowed they will not hesitate to take further action.

While Trump called the move a “signal of friendship,” Japanese Finance Minister Satsuki Katayama warned jittery currency markets of further intervention if volatility persisted.

While China’s Shanghai Composite Index fell 0.6 percent to 3,809.66, Hong Kong’s Hang Seng Index rose 0.5 percent to 26,009.40.

Alibaba Group Holding shares surged 7 percent after the technology giant launched what it described as its largest and most capable artificial intelligence model, Qwen3.8-Max.

Japanese markets ended lower as the yen rose more than 1 percent following suspected intervention by authorities to halt the currency’s slide to fresh 40-year lows. The Nikkei 225 Index slid 0.9 percent to 63,754.90 after hitting a one-week high in the previous session.

The broader Topix Index settled 1.1 percent lower at 3,960.03, dragged down by electronics and auto stocks. Murata Manufacturing and Toyota Motor both fell over 3 percent.

Seoul stocks plunged as semiconductor heavyweights faced selling pressure after a record surge the previous day. The Kospi Index tumbled 5.1 percent to 6,257.45 after soaring nearly 18 percent on Friday.

SK Hynix and Samsung Electronics both fell around 9 percent after having risen by almost the daily permissible limit on Friday.

Australian markets advanced, led by banking and healthcare stocks. The benchmark S&P/ASX 200 Index edged climbed 0.5 percent to 9,019.30 as reports of progress in peace talks involving Iran boosted optimism over the potential for a diplomatic resolution. The broader All Ordinaries Index closed up 0.5 percent at 9,178.40.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index closed up 0.6 percent at 13,774.93 in a broad-based rally.

Europe

European stocks are mostly higher on Monday, while oil prices have fallen more than 5 percent after U.S. President Donald Trump cancelled planned military strikes on Iran and said there is a “good chance” of progress in talks aimed at ending months of fighting.

It is said that negotiators are trying to break the deadlock over transit fees and the management of the Strait of Hormuz.

The German DAX Index is up by 1.3 percent and the French CAC 40 Index is up by 1.1 percent, although the U.K.’s FTSE 100 Index has bucked the uptrend and edged down by 0.1 percent.

In corporate news, Clarkson, a provider of shipping services, has moved sharply higher in London after reporting record first-half profits.

German motion control products maker Stabilus has also rallied after reporting a sharp rise in third-quarter net profit, helped by a one-off gain from the sale of subsidiaries.

Assa Abloy has also advanced after the Swedish door-opening and access products provider signed an agreement to acquire Gunnebo Entrance Control for an undisclosed amount.

Meanwhile, TotalEnergies has slumped after the French energy major agreed to acquire Shell’s 4 GW renewables business while selling a 50 percent stake in a 1.2 GW renewables portfolio to KKR.

Swiss generics and biosimilars drug company Sandoz has also fallen after it reached settlement agreements with 43 US states and territories and indirect reseller plaintiffs to resolve all pending generic pricing litigation claims.

U.S. Economic News

The Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of July at 10 am ET. The ISM’s manufacturing PMI is expected to inch up to 54.0 in July from 53.3 in June, with a reading above 50 indicating growth.

Also at 10 am ET, the Commerce Department is due to release its report on construction spending in the month of June. Construction spending is expected to rise by 0.3 percent in June after ticking up by 0.1 percent in May.