S&P 500 Rockets after Oil Slide

AP, CNBC, Bloombertg, The Wall Street Journal, Market Watch, and Investor’s Business Daily contributed to this report.

Stocks ripped higher Monday as crude cooled off, delivering the kind of relief rally traders have been waiting for since the fighting with Iran began. The benchmark index jumped about 1% and was on pace for its strongest session in roughly five weeks.

Meanwhile, Dow Jones Industrial Average climbed roughly 379 points (about 0.8%) and the Nasdaq Composite rose about 1.3% as of early afternoon, with investors breathing easier after oil reversed course.

Energy was the story. US crude plunged roughly 3.4% to about $95.36 a barrel after spiking above $102 earlier, and Brent eased back to about $102.20 from intraday highs north of $106. That pullback took some pressure off worries about inflation and corporate costs — the big fear if the Strait of Hormuz stays effectively closed and a chunk of global supply stays offline.

The shipping choke point — the Strait of Hormuz — has been at the center of the shock: traffic has been drastically reduced since the conflict began, snarling crude flows and forcing some producers to cut output because tankers can’t move. If that logjam drags on, economists warn it could keep oil elevated and push inflation higher, undoing today’s cheer.

Politically, President Donald Trump over the weekend urged other countries to help reopen the passage and said the US would “help — a lot,” but allies have been cautious, and Europe has asked for more detail about Washington’s plans. Until governments commit to a clear plan, markets are likely to swing with every new development at sea or in the negotiating rooms.

On the stock side, cheaper fuel costs gave a boost to airlines and cruise names that had been hammered by higher jet fuel and bunker prices — and tech heavyweight Nvidia Corporation also helped lift the market after trading gains. Treasuries relaxed a bit too: the 10-year yield slipped as inflation worries eased with the oil decline.

Bottom line: today felt like a reset — a reminder that oil, not earnings, is still calling a lot of the market’s shots these days. But the rally could be fragile: since the war began, price moves have flipped fast. If the Strait reopens and stays open, stocks get a clearer path forward; if it doesn’t, expect more headline-driven whiplash.