Trump Cancels Attack, U.S.-Iran Talks Resume! Dow Futures Surge Over 500 Points, Oil Prices Plummet

U.S. President Trump announced the cancellation of planned military attacks on Iran and revealed that negotiations between the U.S. and Iran will resume, triggering a sharp decline in international oil prices and a broad rally in U.S. stock index futures on Monday (3rd). Dow futures surged by as much as 535 points, or 1%, while S&P 500 futures rose 0.6%, and Nasdaq 100 futures gained 0.2%.

On Sunday, Trump stated he had called off the planned military strike on Iran, with talks set to resume on Monday. Just last Friday, U.S. media reported that as hopes for a negotiated end to the conflict faded and energy prices spiked, Trump was preparing a new wave of airstrikes on Iran. The sudden shift in stance has eased market concerns over potential disruptions in energy supply.

Oil prices plunged on the news. Brent crude futures dropped 5.2% to $83.39 per barrel, while West Texas Intermediate (WTI) crude futures fell even more sharply by 6.2% to $79.45 per barrel.

With energy prices easing, inflation concerns were slightly alleviated, and U.S. Treasury yields declined. The benchmark 10-year Treasury yield fell 6 basis points to 4.68%.

However, Adam Crisafulli, founder of Vital Knowledge, noted that investors remain cautious, as similar waves of optimism have occurred before. Until the conflict is truly resolved, the path forward remains uncertain, and the possibility of a final agreement is still in question.

Monday marked the first trading day of August, as U.S. markets attempted to regain stability after a volatile July. Investors will also be closely watching a series of U.S. labor market data this week, with particular focus on Friday’s release of July’s nonfarm payrolls and unemployment rate.

According to FactSet, the market expects U.S. nonfarm payrolls to increase by 87,500 in July, up from 57,000 in June, while the unemployment rate may rise from 4.2% to 4.3%. These figures will be crucial in assessing the U.S. economic outlook and the Federal Reserve’s policy trajectory.

European markets rose early Monday, with the Stoxx Europe 600 index up 0.3% and auto stocks surging nearly 2.3%. Germany’s DAX climbed 1.3%, France’s CAC 40 rose nearly 1.1%, while the UK’s FTSE 100 dipped slightly by 0.1%.

Asia-Pacific markets were mixed. South Korea’s KOSPI index, after posting its best single-day performance on Friday, fell over 5%. Japan’s Nikkei 225 dropped 0.94%, China’s CSI 300 declined 0.98%, while Australia’s S&P/ASX 200 rose 0.47%.