Markets Surge Over 2% After Trump Postpones Iran Military Action

Key Takeaways

• Stock futures plummeted Monday as Iran launched retaliatory attacks after Trump threatened to target Iranian energy sites
• President Trump subsequently announced a postponement of planned military action following diplomatic discussions with Iranian officials
• Major index futures surged more than 2%, with Dow, S&P 500, and Nasdaq all reversing earlier losses
• Crude oil briefly exceeded $100 per barrel before retreating following Trump’s postponement announcement
• The Russell 2000 index had officially entered correction, trading over 10% beneath its January peak

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Wall Street experienced dramatic volatility Monday as equities initially tumbled before mounting an impressive comeback following President Trump’s decision to delay planned military operations against Iran after engaging in what he described as “productive conversations” with Iranian leadership.

During early trading, Dow Jones Industrial Average futures declined approximately 0.8%. The S&P 500 futures dropped 0.7%, while Nasdaq 100 futures experienced the steepest declines, sliding nearly 1%.

E-Mini S&P 500 Jun 26 (ES=F)

Iran had executed new offensive operations early Monday. These strikes occurred following Trump’s weekend ultimatum, in which he warned of imminent attacks on Iranian energy infrastructure should the Strait of Hormuz remain blocked beyond a 48-hour window.

Iran’s Revolutionary Guards had issued counter-threats, promising to strike Israeli power installations and facilities servicing American military bases throughout the Gulf region if Trump proceeded with his pledge to dismantle Iran’s electrical grid.

Investors were already anxious following four consecutive weeks of declining markets. The technology-heavy Nasdaq registered its largest weekly percentage drop since early February during the previous trading week.

Crude Prices Breach $100 Before Reversing

Oil prices skyrocketed as Middle East tensions intensified. West Texas Intermediate crude contracts spiked to touch the $100 per barrel threshold. Brent crude, serving as the international pricing benchmark, surged beyond $113 per barrel.

Elevated crude prices heighten inflation anxieties and complicate the Federal Reserve’s interest rate policy outlook. Gold contracts, which had maintained positive year-to-date performance, wiped out all 2026 gains amid speculation that the Fed might maintain elevated rates for an extended period.

Equities Mount Dramatic Turnaround

By late morning hours, Dow futures had rocketed upward more than 1,100 points, representing approximately a 2.5% gain. S&P 500 futures advanced beyond 2.3%, while Nasdaq 100 futures climbed 2.4%.

Europe’s STOXX 600 benchmark index reversed into positive territory. Precious metal commodities also registered gains. Crude oil prices tumbled sharply following the strike postponement news.

The CBOE Volatility Index, widely regarded as the market’s fear indicator, retreated after reaching two-week highs. The index last traded down roughly 4 points at 22.79.

Russell 2000 futures, representing small-capitalization equities, soared 4.7% after trading down more than 1% during the opening session. The small-cap benchmark had concluded Friday’s trading session more than 10% below its January 22 all-time closing high, officially confirming correction status.

The Russell 2000’s correction confirmation and the Nasdaq’s month-long losing streak represented the most significant concerns for traders entering Monday’s session.

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