Oil Tumbles, Markets Rally as US and Iran Pause Military Strikes

(WS News) – Global oil prices tumbled and stock markets rallied Monday after the United States and Iran both paused military strikes, easing weeks of escalating tension that had driven crude to its highest levels of the year.

Brent crude, the global benchmark, fell 11.3 percent to close at $85.87 a barrel, its steepest one-day decline since April, while US crude dropped roughly 7 percent to $82.61 a barrel. The combat pause followed nearly two weeks of American strikes on Iranian coastal areas and infrastructure, launched in retaliation for Iranian attacks on ships attempting to transit the Strait of Hormuz. President Donald Trump said the United States halted strikes at Iran’s request, telling reporters aboard Air Force One that Tehran had asked “very nicely” to meet, while warning that attacks would resume if a new ceasefire deal is not reached.

The market relief was tempered by other pressures. A rout in semiconductor stocks weighed on the Nasdaq, with Nvidia shares dropping nearly 5 percent on reports that a Chinese company may be preparing to mass-manufacture key chipmaking equipment, while memory stocks including SanDisk and Micron Technology slid following a large Shanghai initial public offering from a Chinese memory rival. The Dow Jones Industrial Average still gained roughly half a percent to close near 52,210, boosted by the retreat in oil, while the S&P 500 broke a four-session losing streak with a modest gain and the Nasdaq Composite slipped slightly on the chip-sector weakness.

Ship traffic through the Strait of Hormuz remains well below prewar levels, with fewer than 10 commercial vessels passing through as of Monday compared with roughly 100 on a typical day before the conflict began. Oil traders also remain wary of separate threats from Iran-backed Houthi rebels targeting shipping in the Red Sea’s Bab al-Mandeb Strait, a factor that could keep energy markets volatile even as the immediate US-Iran confrontation cools.