Dow jumps over 600 points, oil tumbles after Trump cancels planned Iran strikes

US stock index futures climbed on Monday, August 3, after President Donald Trump said he had called off planned military strikes against Iran and announced that talks between the two countries would resume, easing geopolitical tensions and dragging oil prices sharply lower.

Dow Jones Industrial Average futures rose more than 500 points, or about 1%, while S&P 500 futures gained 0.6%. Nasdaq-100 futures advanced around 0.4% in early trade, setting a positive tone for Wall Street at the start of August after major indexes ended July on a firm note.

Trump said on Sunday, August 2, that he had cancelled a planned attack on Iran, adding that negotiations between Washington and Tehran would restart on Monday. The announcement came after media reports last week suggested the US was preparing a fresh wave of strikes as prospects for a diplomatic breakthrough faded, lifting crude prices.

US benchmark West Texas Intermediate (WTI) crude fell more than 6% to $79.10 per barrel, while global benchmark Brent crude dropped over 5% to $82.99 a barrel as of 8:00 a.m. ET, reversing some of the recent gains driven by geopolitical tensions.

Treasury yields also edged lower as easing concerns over energy-driven inflation boosted demand for government bonds. The benchmark 10-year Treasury yield slipped about 6 basis points to 4.68%.

Among individual stocks, US-listed shares of Alibaba gained in premarket trading after the Chinese technology giant unveiled a new artificial intelligence model.

Investors are also preparing for another busy week of corporate earnings. Palantir Technologies is scheduled to report quarterly results on Monday, while attention will also be on SpaceX's first quarterly earnings since its public listing.

On the macroeconomic front, markets will closely monitor a series of US labour market reports this week, culminating in Friday's closely watched non-farm payrolls and unemployment data, which could provide fresh clues on the health of the economy and the Federal Reserve's policy path.

Also Read: Iran says safe-passage deal alone not enough to reopen Strait of Hormuz