Key Highlights
- Stock futures initially plunged Monday morning following renewed Iranian attacks in response to Trump’s threats targeting Iran’s energy sector
- President Trump subsequently announced a delay in military action against Iran, citing “productive conversations” with Iranian officials
- Major index futures—including the Dow, S&P 500, and Nasdaq—reversed losses and rallied more than 2%
- Crude oil prices surged past $100 per barrel before retreating following Trump’s postponement announcement
- The Russell 2000 small-cap benchmark officially entered correction territory, trading over 10% below its January peak
US equity markets experienced extreme volatility Monday morning, plummeting initially before mounting a dramatic comeback after President Trump announced he would delay planned military operations against Iran following what he described as “productive conversations” with Iranian leadership.
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Dow Jones Industrial Average futures initially declined approximately 0.8% during early trading hours. Futures contracts for the S&P 500 dropped 0.7%, while Nasdaq 100 futures experienced the steepest losses, falling nearly 1%.
The market selloff followed new Iranian military operations earlier Monday. These actions came in response to Trump’s weekend ultimatum threatening strikes against Iranian energy facilities if the Strait of Hormuz blockade continued beyond a 48-hour deadline.
Iran’s Revolutionary Guards had issued counter-threats, warning they would target Israeli power infrastructure and facilities serving US military bases throughout the Gulf region if Trump executed his threat to “obliterate” Iran’s electrical grid.
Investor sentiment was already fragile following four consecutive weeks of Wall Street declines. The technology-heavy Nasdaq registered its largest weekly decline since early February during the previous week.
Crude Oil Surges Past $100 Before Retreating
Oil prices skyrocketed amid escalating Middle East tensions. West Texas Intermediate crude futures briefly touched the $100 per barrel threshold. Brent crude, the international pricing benchmark, climbed beyond $113 per barrel.
Elevated crude prices sparked renewed inflation concerns and questions about Federal Reserve monetary policy trajectory. Gold futures, which had posted gains year-to-date, surrendered their 2026 advances on speculation the Fed might maintain elevated interest rates for an extended period.
The market narrative shifted dramatically when Trump reversed course, declaring the US military would postpone planned strikes following “productive conversations” with Tehran. Markets responded immediately to the news.
Equities Mount Powerful Comeback
By mid-morning trading, Dow futures had skyrocketed more than 1,100 points, representing a gain of approximately 2.5%. S&P 500 futures advanced over 2.3%, and Nasdaq 100 futures climbed 2.4%.
Europe’s STOXX 600 benchmark reversed earlier losses and traded in positive territory. Precious metals also posted gains. Crude oil prices tumbled sharply following Trump’s announcement.
The CBOE Volatility Index, commonly referred to as Wall Street’s fear gauge, declined after reaching its highest reading in two weeks. The index last traded down roughly 4 points at 22.79.
Russell 2000 futures, representing small-capitalization stocks, surged 4.7% after being underwater more than 1% earlier during the session. The small-cap benchmark closed Friday trading more than 10% beneath its January 22 all-time high, officially confirming its entry into correction territory.
Chris Beauchamp, chief market analyst at IG Markets, commented: “This is obviously a postponement, not a complete ceasefire, and we will see what happens from here. What’s done is still not undone, so the impact has yet to be seen, but obviously, markets are breathing a sigh of relief.”
The Russell 2000’s confirmation of correction status alongside the Nasdaq’s month-long losing streak represented the most significant areas of market weakness entering Monday’s volatile trading session.
