TLDR
- The Dow rose over 600 points Monday as oil prices pulled back from $100 a barrel
- WTI crude briefly crossed $100 for the first time since 2022 before falling back to around $94
- Trump is pressing allies to help reopen the Strait of Hormuz, where 20% of global oil supply flows
- Bitcoin, Ethereum, and XRP all surged as crypto was treated as a hedge against Iran-related risk
- The Federal Reserve meets Tuesday and Wednesday, with rates expected to stay unchanged
US stocks climbed Monday as oil prices pulled back from historic highs, giving investors some room to breathe after weeks of pressure tied to the conflict in Iran.
The Dow Jones Industrial Average rose around 600 points, or roughly 1.3%. The S&P 500 gained about 1.4% and the Nasdaq added around 1.5%.
West Texas Intermediate crude briefly topped $100 a barrel overnight — its first time at that level since 2022 — before falling back to around $94. Brent crude held just above $100.
The drop in oil gave stocks an opening to rally. Paul Hickey of Bespoke Investment Group said the short-term direction of the market remains tied directly to where oil goes next.
“With no spike this morning, equities are taking the opportunity to rally, and we’ve been picking up steam as the morning drags on,” Hickey said.
The Strait of Hormuz, which handles around 20% of global oil supply, has been disrupted for three weeks now. President Trump called on NATO allies over the weekend to join the US in helping break Iran’s blockade of the waterway.
Trump warned that NATO faces “a very bad future” if allies do not help. Several oil tankers did transit the strait over the weekend, which offered markets some hope.
How Oil Prices Are Shaping Fed Expectations
The Federal Reserve begins its two-day policy meeting Tuesday. Officials are widely expected to keep interest rates unchanged Wednesday.
But the oil situation is adding uncertainty. Higher energy prices push up inflation, which could complicate the Fed’s decisions on rates in the months ahead.
Chris Larkin of E*TRADE from Morgan Stanley said any rebound in stocks could be short-lived without a clear path for oil prices to come down. The S&P 500 is still down about 5% from its January 27 high.
Forecasts from central bank officials released Wednesday will be watched closely for any signals about how policymakers see the Iran conflict affecting their outlook.
Crypto Markets Climb on Iran Hedge Demand
Bitcoin, Ethereum, and XRP all moved higher Monday. Analysts pointed to growing demand for crypto as a hedge against geopolitical risk tied to Iran.
This mirrors a pattern seen in past periods of Middle East tension, where some investors moved money into digital assets as a store of value outside traditional markets.
On the corporate side, Nvidia kicked off its annual GTC conference Monday with a keynote from CEO Jensen Huang. The event focuses on AI and chip technology and is being closely watched by investors tracking the AI sector.
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