Stocks Rally, Oil Sinks Monday         03/23 15:27

   A cautious relief swept through financial markets Monday after President 
Donald Trump said the United States has talked with Iran about a possible end 
to their war. Oil prices eased, and stock prices rose on Wall Street following 
severe losses taken elsewhere in the world before Trump's announcement.

   NEW YORK (AP) -- A cautious relief swept through financial markets Monday 
after President Donald Trump said the United States has talked with Iran about 
a possible end to their war. Oil prices eased, and stock prices rose on Wall 
Street following severe losses taken elsewhere in the world before Trump's 
announcement.

   The price for a barrel of Brent crude fell 10.9% to settle at $99.94, down 
from nearly $120 at one point last week, after Trump said the United States and 
Iran held productive talks the last two days "regarding a complete and total 
resolution of our hostilities in the Middle East." The S&P 500 climbed 1.1% for 
its best day since the war began.

   The market's moves were tentative, though, after Iran denied such talks took 
place and Iranian parliament speaker Mohammad Bagher Qalibaf said that 
"fakenews is used to manipulate the financial and oil markets" in a posting on 
X. The Dow Jones Industrial Average went from a surge of nearly 1,135 points 
during the morning to a more modest gain of 540 before accelerating to finish 
with a climb of 631.

   Over the weekend, Trump had threatened to "obliterate" Iran's power plants 
if it doesn't open up the Strait of Hormuz within 48 hours. The narrow waterway 
off Iran's coast has become a sore point for Trump and the economy because a 
sharp slowdown in traffic is preventing oil tankers from leaving the Persian 
Gulf to supply customers around the world.

   Trump said Monday that he is postponing attacks on Iranian power plants for 
five days to allow talks to continue. Quickly afterward, though, came the 
denials from Iran about talks, while Iran's semiofficial Fars and Tasnim news 
agencies portrayed the American president as backing down.

   Turkey and Egypt, meanwhile, said they had spoken to the warring parties, 
the first sign of coordinated mediation, which could be an encouraging signal.

   Amid all the developments, the price of Brent crude fell as low as $96 
immediately after Trump announced the postponement but quickly recovered a 
chunk of that loss. Benchmark U.S. crude had a similar reaction, immediately 
dropping toward $84 per barrel before yo-yoing back above $92 and then settling 
at $88.13, down 10.3% from Friday.

   Financial markets have had vicious swings, both up and down, since the war 
began because of uncertainty about how long it may last. The fear is that a 
long-term disruption could keep so much oil and natural gas off global markets 
that it creates a punishing wave of inflation for the global economy.

   The swings of the past few weeks are similar to, but not as dramatic as, 
those that hit last year when Trump shocked the global economy on "Liberation 
Day." Many of his worldwide tariffs ended up being milder than he initially 
threatened, and the back-and-forth in negotiations led to historic moves up and 
down.

   Monday's overriding reaction in financial markets was nevertheless one of 
relief. The S&P 500 rose 74.52 points to 6,581.00. The Dow climbed 631.00, or 
1.4%, to 46,208.47, and the Nasdaq composite jumped 299.15, or 1.4%, to 
21,946.76.

   In Europe, stock indexes immediately flipped from losses to gains following 
Trump's announcement. France's CAC 40 rose 0.8%, and Germany's DAX returned 
1.2%.

   That compares with sharp drops for Asian stock markets, which finished 
trading before Trump made his announcement. South Korea's Kospi careened 6.5% 
lower, Japan's Nikkei 225 dropped 3.5% and Hong Kong's Hang Seng fell 3.5%.

   Treasury yields also eased in the bond market following Trump's 
announcement. High Treasury yields and disruption in the bond market were 
factors that Trump named a year ago when he backed off his initial threats for 
global tariffs. The moves caused critics to allege Trump always chickens out, 
or "TACO," if financial markets show enough pain.

   Like oil prices, Treasury yields still remain well above where they were 
before the war began, even after Monday's drop. The worry is that high oil 
prices could keep the Federal Reserve and other central banks from cutting 
interest rates, which would give the global economy and prices for investments 
a boost.

   The yield on the 10-year Treasury fell to 4.35% from 4.39% late Friday. But 
it remains solidly above its 3.97% level from just before the war.

   On Wall Street, companies with big fuel bills that will benefit from any 
easing of oil prices led the market. Norwegian Cruise Line Holdings surged 
6.2%, while United Airlines climbed 4.5%, and American Airlines rose 3.6%. All, 
though, are still down for the year so far.

   Stocks of smaller companies were also particularly strong, and the Russell 
2000 index of smaller stocks jumped a market-leading 2.3%. It had dropped last 
week to 10% below its record, a sharp enough fall that professional investors 
have a name for it: a "correction."

   The S&P 500, which is the main measure of the U.S. stock market's strength, 
pulled back within 5.7% of its own all-time high set early this year.