Traders work on the floor of the New York Stock Exchange on June 10, 2025.
NYSE
Stocks rebounded on Monday as investors were optimistic that the conflict between Israel and Iran may remain contained. The spike in oil prices due to the escalating conflict also eased.
The Dow Jones Industrial Average rose 470 points, or 1.1%. The S&P 500 also advanced 1.2%, while the Nasdaq Composite surged 1.6%.
WTI crude oil futures fell more than 4% to $69.81 a barrel after trading above $77 earlier in the overnight session.
Traders have been closely watching the Middle East after Israel’s strike on Iran Friday. Iran launched missiles in retaliation, increasing the severity of conflict in the region.
However, there was some optimism on Monday that the situation wouldn’t escalate after a Wall Street Journal report said that Iran has signaled through intermediaries that it would be open to restarting negotiations as long as U.S. doesn’t join Israel in the attacks. The report also said that Iran has messaged to Israel that both sides should keep attacks contained.
Iran has asked Saudi Arabia and other Arab nations to message President Donald Trump about pressuring Israel into an immediate ceasefire and is offering to restart nuclear deal negotiations, Reuters reported, citing sources.
“The market is taking comfort from the prospect that the conflict could stay in the limited war mode,” Krishna Guha, Evercore ISI’s vice chairman, said in a note Monday. “We assess this is possible but continue to anticipate the conflict will last for a few weeks in the base case and still see elevated risk of escalation that envelops energy and draws in the U.S.”
The attacks continued for a fourth day Monday, with the two countries targeting each others’ energy facilities, an escalation which could rattle the global economy and markets further in the new week. Iran said it is considering shutting down the Strait of Hormuz, a key route for the global oil market. Israel claimed on Monday to have achieved “aerial superiority” over Iran, according to a military spokesperson.
The conflict prompted a sell-off in stocks on Friday, with the Dow tumbling more than 700 points and all three of the major indexes dropping more than 1%. The Dow finished the week down 1.3%, while the S&P 500 and Nasdaq Composite lost 0.4% and 0.6%, respectively.
Oil prices initially surged following Israel’s attack, weighing on risk assets. Gold prices also rallied, as the metal is considered a safe haven trade that investors flock to in times of market volatility.
“Magnificent Seven” stocks were higher Monday as the pullback in oil prices caused investors to take on more risk again. Tesla was up more than 1%, and Meta Platforms increased more than 3%. Meanwhile, Palantir, which is viewed as a beneficiary of increasing global conflict, moved more than 3% higher.
Investors also digested weaker-than-expected manufacturing survey data Monday morning, which came ahead of the Federal Reserve’s interest rate decision on Wednesday.
Fed funds futures are pricing in a 100% likelihood of the central bank keeping rates unchanged, per CME Group’s FedWatch tool, even as Trump has been pressuring Fed Chair Jerome Powell for a rate cut. Higher oil prices from the Middle East conflict likely further reduce the odds the Fed will ease monetary policy anytime soon.
