The Dow Jones Industrial Average surged 711 points on Monday — a 1.4% jump — after President Trump announced he was holding off on military strikes against Iran. The S&P 500 climbed 1%, the Nasdaq composite rose 1.2%, and Brent crude oil cratered 5.4% to $83.70 a barrel.
Turns out markets like it when the guy with the launch codes uses them as leverage instead of lighting them off.
The rally came after weeks of gut-churning volatility driven almost entirely by the Iran standoff. Brent crude had been swinging between $72 and $102 a barrel throughout July, dragging everything from airline stocks to grocery prices along for the ride. Trump's decision to pull back — not retreat, not surrender, but strategically pause — instantly took pressure off the single biggest cost driver in the global economy.
The 10-year Treasury yield, which had climbed to 4.75% during the worst of the tensions, dropped to 4.68%. That might sound like decimal-point theater, but before the Iran war pushed rates skyward, the 10-year sat at 3.97%. Every tick higher means more expensive mortgages, car loans, and business credit lines. Every tick lower is breathing room for every American household carrying debt — which is most of them.
Airline stocks, hammered for weeks by jet-fuel cost fears, led the rally. United Airlines jumped 6.7%. American Airlines climbed 6.4%. Even Tyson Foods ticked up 1.8%, because when oil drops, so does the cost of shipping chicken to your grocery store. The one notable loser was Micron Technology, which slid 3.2% — though that's after running up roughly 180% year-to-date, so calling it a "loss" is like complaining about the dessert course at a steakhouse.
International markets told a messier story. South Korea's Kospi index dropped 5.1% Monday after posting a staggering 17.9% gain on Friday — the largest single-day jump in the index's entire history. Tokyo's Nikkei 225 slid 0.9%. The whiplash overseas underscores something the domestic coverage keeps glossing over: the Iran standoff wasn't just an American problem. It repriced risk everywhere, and foreign markets are still recalibrating.
The broader earnings picture underneath the geopolitical noise is quietly remarkable. S&P 500 companies that have reported spring-quarter results — 61% of them so far — are showing earnings 47% higher than the previous year. That's the strongest growth since spring 2021, back when everything was bouncing off pandemic lows and the comparison was almost unfair. This time the baseline is normal, and they're still printing 47%.
Critics will argue that holding off on strikes is weakness — that Trump blinked. Which is an interesting way to describe a president whose military buildup in the region forced Iran to the negotiating posture that made the pause possible in the first place. You don't get a 5.4% oil drop and a 711-point Dow rally because the other side thinks you're bluffing.
Sometimes the most expensive thing a country can do is pull the trigger. Sometimes it's free to wait.