US stocks saw renewed buying interest on Monday, 23 March, as investor sentiment towards risk assets improved after US President Donald Trump said he had ordered the military to postpone strikes against Iranian power plants following “productive conversations” with Tehran.
The S&P 500, which had closed the last three weeks in the negative, jumped 2.23% to hit an intraday high of 6,651, while the Dow Jones and Nasdaq-100 gained 2.5% and 2.4%, respectively, at their intraday highs. All three indices were set for their biggest single-day gains since 6 February.
Meanwhile, the Russell 2000 rose 2.9%. The small-cap index, which is sensitive to higher interest rates, had ended more than 10% below its record close of 22 January on Friday, confirming it had entered correction territory.
In a social media post today, Trump announced the extension of the deadline for Iran to reopen the Strait of Hormuz, a key chokepoint that Iran has controlled since the fallout of the war, disrupting energy flows to Asian countries.
Trump also held out the possibility of a resolution to the war, telling reporters that Iran wants “to make a deal,” and claiming US envoys have been holding talks with a “respected” Iranian leader.
Trump’s comments came as the Middle East conflict entered its fourth week, which had triggered massive selling across global markets, including the US stock market, although it held relatively better compared to the sharp declines seen in Asian markets.
Meanwhile, Iran’s foreign ministry refuted the claims, with a spokesperson saying there had been no discussions with the United States and that its conditions to end the war had not changed. A source told Reuters that Israeli officials believe the US and Iran could hold talks this week.
Oil crash boosts cyclicals
Shortly after Trump’s statement, crude oil prices crashed, with Brent crude futures slumping 14.43% from Friday’s close to hit an intraday low of $96 per barrel, breaking below the $100 mark for the first time since 11 March.
However, prices are still up around 46% so far this month. Meanwhile, WTI crude futures also tanked 14.25% to reach an intraday low of $84.23 per barrel.
The sharp pullback in oil prices boosted airline stocks, with American Airlines and United Airlines rising more than 5% each. Cruise operators also surged, with Carnival Corp, Norwegian Cruise Line Holdings, and Viking Holdings gaining over 7%.
In addition, banks, which had sold off sharply during the conflict, rebounded, with JPMorgan Chase and Goldman Sachs rising 1.7% and 3%, respectively.
In terms of sectors, the S&P 500 Banking index gained 1.8%, while consumer discretionary stocks rose 3%.
Synopsys climbed 3.7% after activist investor Elliott Investment Management built a multibillion-dollar stake in the company.
Among technology stocks, Palantir jumped 4.57% to $157.56, while Broadcom, PayPal, Amazon, and Airbnb also gained over 2%.
Select stocks lag despite broader rebound
Even as the broader market recovered from recent losses, some stocks in the S&P 500 continued to struggle for momentum.
Enphase Energy fell 5.35% to $41.75, while Micron Technology was among the top laggards, declining 4.17% to $405.
Other stocks such as Fair Isaac, Seagate Technology, Domino’s Pizza, and Western Digital were also trading lower by more than 2%.
(With inputs from Reuters, AP)
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