Wall Street staged a significant rally on Monday, with major U.S. stock indices fully recovering the losses incurred since the onset of the U.S.-Iran conflict in late February. The S&P 500 climbed 1 percent, returning to its pre-war level and sitting just 1.3 percent below its all-time high set earlier this year. The Dow Jones Industrial Average gained 301 points, or 0.6 percent, while the Nasdaq composite advanced 1.2 percent.
"Markets are taking some encouragement from the fact that the two sides are talking and that the broader ceasefire seems to be holding, for now," said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.
The recovery comes despite ongoing geopolitical tensions. Over the weekend, ceasefire talks failed to end the war, prompting President Donald Trump to announce a blockade of the Strait of Hormuz—a critical chokepoint for global oil shipments. Iran responded by threatening ports in the Persian Gulf and Gulf of Oman.
Oil prices, which had surged above $100 per barrel following the failed talks, pared some gains as Monday progressed. Brent crude, the international benchmark, settled at $99.36 per barrel, up 4.4 percent for the day but well below its recent peak of $119. The price remains significantly higher than its pre-war level of roughly $70.
Market analysts note that trading has been volatile, swinging between fears of a prolonged conflict and optimism that a resolution could stabilize global energy supplies. The modest moves on Monday contrasted with the extreme swings seen in recent weeks, suggesting a tentative calm as investors weigh the prospects for diplomacy.