By Purvi Agarwal and Twesha Dikshit
Mar 23 (Reuters) – The main U.S. indexes climbed in broad gains on Monday after President Donald Trump said he had ordered the military to postpone strikes against Iranian power plants following “productive conversations” with Tehran.
Iran’s foreign ministry refuted the claim, with a spokesperson saying they had held no discussions with the United States and that their conditions to end the war had not changed. A source told Reuters Israeli officials believed the U.S. and Iran could hold talks this week.
Global markets staged a sharp recovery after Trump’s comments, with Europe’s STOXX 600 and precious metals edging up while oil prices fell, signaling improving risk appetite. They had been trading lower after threats of attacks on Israeli and Iranian power networks.
“It (the comments) buys time. We are in a very intense conflict… maybe they need some more time to prepare whatever they’re staging to do. I don’t see this conflict going back in the bottle overnight,” said David Bianco, Americas chief investment officer at DWS.
Investors trimmed bets on interest-rate hikes from the U.S. Federal Reserve following Trump’s comments, which now stand at 24% for a cut in December, compared with more than 50% earlier, according to CME Group’s FedWatch.
Markets had scaled back bets last week to show no easing was expected in 2026 after the central bank struck a hawkish tone, projecting higher inflation and a single reduction this year.
“The Fed is stuck where they are for a while longer. Conflict is inflationary, but you don’t hike when your country’s in the middle of a deep, escalating conflict,” said Bianco.
At 11:43 a.m. ET, the Dow Jones Industrial Average rose 888.09 points, or 1.95%, to 46,465.56, the S&P 500 added 108.40 points, or 1.67%, to 6,614.88, and the Nasdaq Composite gained 399.63 points, or 1.85%, to 22,047.64.
All three indexes were set for their biggest single-day jumps since February 6.
The Russell 2000 gained 2.9%. The small-cap index, sensitive to higher interest rates, on Friday ended more than 10% below its record close of January 22, confirming it had been in correction territory.
The CBOE Volatility Index, Wall Street’s fear gauge – retreated after earlier hitting its highest level in two weeks – and was last down 1.82 points at 24.96.
Oil prices fell by more than 10%, but energy stocks were mixed. The energy index was up 0.6%, in line with broader markets.
Airlines jumped, with American Airlines and United Airlines adding more than 5% each. Cruise ship operators soared, with Carnival Corp, Norwegian Cruise Lines and Viking Holdings all gaining more than 7%.
