U.S. Stocks Drift Higher, Oil Prices Flip After U.S. Strikes On Iran

The U.S. military's bunker-busting entry into Israel’s war with Iran has yet to rattle global markets—at least for now.

The S&P 500 was up 0.5% in morning trading, the Dow Jones Industrial Average rose 83 points, or 0.2%, while the Nasdaq Composite gained 0.6%.

Despite the high-stakes escalation, early trading on Monday reflected cautious optimism that Iran will refrain from retaliatory actions that could disrupt the global oil supply and, by extension, its own economy, according to Associated Press reporters Stan Choe, Elaine Kurtenbach, Bernard Condon, Mayuko Ono, and Matt Ott.

The S&P 500 was up 0.5% in morning trading, bouncing back from a volatile previous week marked by investor anxiety over the conflict. The Dow Jones Industrial Average rose 83 points, or 0.2%, while the Nasdaq Composite gained 0.6%.

Oil prices initially surged by 4% after trading opened on Sunday night but quickly reversed as market focus shifted from the U.S. strike to Iran’s potential response.

By Monday morning, U.S. benchmark crude was down 0.9% at $73.15 per barrel, while Brent crude fell 1.1% to $76.15.

Despite the pullback, oil remains significantly higher than it was before hostilities began, when U.S. crude hovered near $68 per barrel.

Analysts note that a full blockade of the Strait of Hormuz—through which roughly 20% of the world’s oil supply passes—remains unlikely. Iran, which uses the strait to export most of its own crude to China, relies heavily on oil revenues and is seen as unwilling to risk cutting off its economic lifeline.