Markets Rebound as Oil Prices Soften Amid US-Israel-Iran Tensions

U.S. stocks rallied, and oil prices eased after President Trump indicated progress in the war with Iran. Despite initial losses, Wall Street rebounded as G7 nations considered tapping reserves to curb inflation. European and Asian markets, however, suffered due to oil price spikes and geopolitical tensions.

On Monday, Wall Street stocks staged a recovery as oil prices softened, following remarks from President Donald Trump about the war against Iran being "very complete." Trump's comments sparked optimism, despite initial market jitters amid rising oil prices, which had threatened global inflation and prompted central banks to consider hiking interest rates.

During trading, oil prices spiked by up to 29% as Saudi Arabia and OPEC reduced supplies amid escalating U.S.-Israeli-Iran tensions. Prices later retreated when the U.S. and G7 contemplated using strategic reserves to control inflation pressures. The Dow and S&P 500 posted gains, while the Nasdaq surged, undeterred by Iran's Supreme Leader succession exacerbating Middle East turmoil.

Contrastingly, European and Asian shares suffered, with the STOXX 600 posting its worst week in nearly a year. Japan's Nikkei fell sharply, and China's markets slumped despite their oil reserves. U.S. Treasury yields fell after oil prices dipped, while investors speculated on potential Fed interest rate cuts later in the year amid ongoing financial market rotation and dispersion.

(With inputs from agencies.)