Stocks Climb Back as Traders Bet on a Trump-Iran Deal

With input from CNBC, Market Watch, and Bloomberg.

Wall Street started shaky, then flipped.

The S&P 500 edged higher Monday, climbing about 0.5% as investors latched onto fresh hopes that the US and Iran might still strike a deal. The Nasdaq Composite did even better, up 0.7%, while the Dow Jones Industrial Average added a modest 38 points.

Tech stocks did most of the heavy lifting. Oracle jumped sharply, and Palantir Technologies also moved higher, helping push the broader market into the green.

Not everyone joined the rally. Goldman Sachs slipped, even after posting solid earnings. Traders zeroed in on weaker-than-expected results from its fixed income division, dragging the stock down around 2%.

The real mood shift came from Washington.

Donald Trump said the US had been contacted by the “other side,” adding that Iran was eager to make a deal. There’s been no confirmation from Tehran – but the comment was enough to lift sentiment.

That optimism is running headfirst into reality.

Over the weekend, talks in Islamabad collapsed without an agreement. In response, the US moved ahead with a naval blockade tied to the Strait of Hormuz, a critical chokepoint for global oil flows. The blockade officially kicked in Monday, though US forces say ships heading to non-Iranian ports won’t be stopped.

The fallout hit energy markets fast.

US crude climbed above $99 a barrel, while global benchmark Brent pushed past the same level. Higher oil prices are back in focus – and so is the risk they pose to already strained economies.

Diplomatic gaps remain wide. Iran is pushing for control over the Strait, access to frozen assets, and war-related compensation. US officials, including Vice President JD Vance, walked away from the latest round of talks citing major disagreements, including Iran’s nuclear ambitions.

Behind the scenes, mediators from countries like Pakistan, Egypt, and Turkey are still trying to keep discussions alive.

Markets are caught in the middle – hopeful, but uneasy.

Just last week, a temporary ceasefire helped fuel a strong rally. The S&P 500 jumped 3.6%, the Nasdaq surged nearly 5%, and the Dow gained 3%, marking their best stretch in months.

That momentum hasn’t completely faded. The S&P even briefly turned positive for the year after being down more than 7% at the height of the conflict.

Still, investors are recalibrating.

The possibility of prolonged tensions – and the threat of further escalation, including potential US strikes – is forcing traders to rethink valuations. The Strait of Hormuz remains the pressure point. What happens there could set the tone for both oil prices and global markets in the days ahead.

For now, though, a few hopeful comments were enough.