Global oil prices jumped overnight and U.S. stocks indexes opened higher, after a weekend that saw Iran-backed Houthi militants launch ballistic missiles at Israel and 3,500 additional U.S. troops arrive in the Middle East as the conflict rounded one month.
Brent crude oil, the global benchmark, surged 2.7% to nearly $116 a barrel, the highest level since the conflict started, while U.S. West Texas Intermediate crude climbed 2.2% to about $102 a barrel.
Despite the higher oil prices, all three major U.S. stock indexes began the trading day on a positive upswing after posting steep losses late last week.
While some traders appeared to bet that the sell-off sparked by the war had reached a low-point for now, investors also increased their purchases of U.S. government bonds over fears of an economic slowdown. This may have also been supporting stocks, as traders now expect slightly lower interest rates from the Federal Reserve.
Traders also appeared to have been placated somewhat by new remarks from President Donald Trump, who told reporters aboard Air Force One late Sunday that the U.S. “will make a deal” with Iran and that negotiations between the two countries are going well.
“I think we’ll make a deal with them, pretty sure, but it’s possible we won’t,” he told reporters. He later said a deal could come “soon.”
Trump also said Iran “gave us most of” a 15-point plan the U.S. sent Tehran to end the war, something Iran has yet to publicly confirm, and that 20 boatloads of oil — on top of 10 the previous week — will be passing through the Strait of Hormuz beginning Monday “out of a sign of respect.”
Trump separately told the Financial Times on Sunday that an Iran deal could be made “fairly quickly” and that he wants to “take the oil in Iran.”
Still, some investors have begun to question President Donald Trump’s ability to reassure financial markets without material progress on the ground.
Average U.S. gasoline prices hit $3.99 a gallon Monday, according to AAA, the highest since the summer of 2022. Bloomberg News reported that U.S. officials and Wall Street analysts have begun considering the prospect that oil prices could surge to as much as $200 a barrel, as the largest oil shock in decades continues to reverberate.
Patrick De Haan, chief analyst at Gas Buddy, estimates that U.S. drivers will soon have spent an additional $10 billion on gasoline since the conflict began just one month ago.
