Stocks made a big comeback from earlier losses on Monday as investors cheered updates from President Donald Trump that the war against Iran could be reaching its end.
The Dow Jones Industrial Average
On Monday, Trump told a CBS News White House correspondent that "the war is very complete, pretty much," and adding that the U.S. is "very far" ahead of the Trump administration's initial timeline of four to five weeks. The comments led West Texas Intermediate crude futures to fall to as low as $81 a barrel -- the domestic benchmark traded above $119 overnight for the first time since 2022 following Russia's invasion of Ukraine.
The travel sector continued to decline on Monday as oil prices remained in flux, leading investors to sell on concerns of near-term profit impacts. Shares of Carnival Cruise
Deutsche Bank strategist Henry Allen wrote in a Monday note that Wall Street still has some room to run even as higher oil prices hamper market outlooks in recent sessions, highlighting that large sell-offs historically follow either a large oil price spike sustained over several months, a hawkish monetary policy from the Federal Reserve, or broader macroeconomic weakness.
Allen noted that markets are "much closer" to these thresholds than a week ago, "but on several metrics we aren't quite there yet, which explains why equities aren't yet seeing bear-market declines, like we saw in 2022."
"In essence, we're getting much closer to the situations that prevailed around larger selloff, be we're not yet at the severity levels that accompanied the 2022 turmoil, or previous oil shocks like the 1970s," Allen said.
Looking ahead, market participants will continue to monitor the conflict between the United States and Iran on Tuesday. Key earnings set to release throughout the day include Oracle
