The S&P 500 closed Monday at its highest level since before the Iran war began, recording a gain of just over one percent to settle at 6,886.24 in a session that opened deep in the red before a presidential social media post triggered one of the more dramatic intraday reversals of recent memory. The broad index has now erased all of its war-related losses, a feat that would have seemed implausible just a week ago.
The catalyst was a Trump post on Truth Social late in the morning session, in which he indicated that Iran had contacted his administration “to work out a deal.”
The claim arrived just hours after CENTCOM officially confirmed the commencement of a naval blockade targeting all maritime traffic entering and exiting Iranian ports, which had initially sent futures down more than half a percent and oil prices spiking toward $104 per barrel. The reversal was swift and decisive — software stocks, which have been among the session’s worst performers, jumped by the most in a single day in nearly a year.
Oracle and Palantir Technologies led the technology recovery, rising roughly 13 percent and three percent respectively, pulling the Nasdaq Composite up 1.23 percent to 23,183.74. The Dow Jones Industrial Average added 301 points after recovering from an earlier decline of more than 400 points, settling at 48,218.25. The S&P 500’s close put it back in positive territory for the year.
Goldman Sachs’ strong earnings were largely overshadowed by the geopolitical drama, with the stock ultimately closing lower despite a record quarterly performance. Energy sector stocks moved in the opposite direction to the broader market, with crude oil ending the session up 2.6 percent at $99.08 per barrel despite the partial recovery in equities. The divergence signals that oil markets remain more sceptical of a near-term diplomatic resolution than equity investors.
The VIX fear gauge climbed back above 20 earlier in the session before easing, reflecting the psychological whiplash of a day that moved from blockade escalation to diplomatic opening within the span of a few hours.
The question investors are now pricing is whether Trump’s comment about Iranian contact represents a genuine opening or another episode in the cycle of escalation and partial de-escalation that has characterised the past six weeks.