U.S. stocks notched strong gains on Monday, bolstered by Middle East de-escalation hopes.
Wall Street rocketed out of the gate after President Donald Trump said the U.S. and Iran had held "productive" talks and that there was a "very serious chance of making a deal." However, investors checked their enthusiasm after Tehran dismissed Trump’s claims.
The benchmark S&P 500 index advanced 1.2% to end at 6,586.77, paring back an advance of as much as 2.3%. The tech-heavy NASDAQ Composite added 1.4% to close at 21,946.76 points, eating into a climb of as much as 2.5%. The blue-chip Dow Jones Industrial Average climbed 1.4% to settle at 46,208.53 points, cutting into an increase of as much as 2.5%.
"Today’s surge in markets simply shows that investors are looking for any excuse to be buyers and turn bullish again and put this chapter of Trump 2.0 in the rear view mirror," Jake Dollarhide, CEO at Longbow Asset Management, told Investing.com.
Discover more Wall Street insights on InvestingPro - now 50% off Trump touts Iran talks, Tehran reportedly denies In a social media post, Trump said that the talks over the last two days about arranging a “complete and total resolution” to hostilities were “productive.”
“Based on the tenor and tone of these” conversations, which will continue throughout the week, Trump said he had instructed the Pentagon to “postpone any and all military strikes” against Iranian power plants and energy infrastructure for five days.
However, Iranian state media said Tehran has had no direct discussions with the U.S. Iran’s foreign ministry spokesperson dismissed claims of any talks and said the country’s position on the Strait of Hormuz and the "prerequisites for ending the war remains exactly as before," state media said.
According to the Wall Street Journal, Iran’s Fars news agency reported that there are no direct or indirect communications with the U.S. Fars added that Trump has backed down on targeting Iranian power plants following Iranian threats to retaliate with strikes on similar sites in West Asia.
"We have had very, very strong talks. We’ll see where they lead. We have major points of agreement ... They went, I would say perfectly," Trump later told reporters outside Air Force One.
"We have a very serious chance of making a deal. That doesn’t guarantee anything ... We are in the throes of a real possibility of making a deal ... But again, I’m not guaranteeing anything," the president added.
Trump said he wants to "see no nuclear bomb" when asked what the goal of the latest talks were. He said the U.S. is speaking with "a top person in Iran," but clarified it was not Iran’s Supreme Leader, Mojtaba Khamenei.
Trump later largely reiterated his comments at an event in Memphis, Tennessee.
"There will be a lot of focus in the coming days on whether the Trump administration’s position holds, whether talks can de-escalate the situation and whether the market can build on its new-found momentum. Hints of some renewed tetchiness as European markets headed for the close were a reminder that much is still to be resolved," Dan Coatsworth, head of markets at AJ Bell, said.
