Dow Opens Higher as Trump Calls Off "Massive" Iran Attack to Pursue Talks, Sending Oil Prices Sharply Down

U.S. stocks opened higher Monday, with the Dow Jones Industrial Average trading at 53,049.73 as of 9:30 a.m. Eastern, after President Donald Trump said he had called off a planned military strike against Iran in order to pursue new diplomatic talks, sending oil prices sharply lower and lifting broader market sentiment.

Dow futures had climbed 1% ahead of the opening bell, while Nasdaq-100 futures rose roughly 0.3% and S&P 500 futures gained 0.6%, according to Yahoo Finance, as investors welcomed a turn toward diplomacy following a volatile stretch of fighting between the United States and Iran. Trump described the decision to call off the operation directly, telling reporters aboard Air Force One over the weekend that Iranian officials were aware their planned attack had been detected. "They knew the extent of the attack because they saw it forming," Trump said. "We're talking to them in the form of a negotiation." Trump had separately described the canceled operation as "massive" in scale, and posted on Truth Social urging his administration to finalize a deal focused on reopening the Strait of Hormuz. "Get to work, everybody, and get it DONE," Trump wrote.

Oil prices fell sharply Monday in response to the diplomatic shift, according to TheStreet, as markets priced in reduced near-term risk of further disruption to Middle East energy infrastructure and shipping routes through the strategically vital Strait of Hormuz.

Monday's session opened a busy week for corporate earnings and economic data. Palantir Technologies was scheduled to report results Monday, while markets separately awaited SpaceX's first quarterly earnings report since becoming a publicly traded company, with the stock hovering near an all-time low heading into the release. Later in the week, McDonald's, Kraft Heinz, Costco Wholesale and Walt Disney are all scheduled to report results, alongside a wave of technology and chipmaker earnings, including Advanced Micro Devices.

The broader earnings season has continued to serve as a key source of investor optimism heading into August. Of the roughly 300 S&P 500 companies that had reported results so far, 85% had beaten analyst expectations, according to FactSet data cited by CNBC, with aggregate corporate profits for S&P 500 companies tracking to grow more than 47% for the period. RBC Capital Markets strategist Lori Calvasina reiterated her S&P 500 price target of 8,150 following the recent earnings-driven rally, noting that a stretch of market choppiness had opened up selective buying opportunities even as risks remain heading into the fall.

Monday's session followed a particularly strong close to the previous week, driven substantially by Microsoft's blockbuster earnings report. Microsoft shares had surged 15.5% the prior Thursday, marking the company's best single-day performance since 2008, after the company reported strong results and committed to remaining free cash flow positive through fiscal year 2027. Amazon shares also continued extending gains following the company's own strong earnings report, while Apple shares showed early weakness following its results, according to commentary from Charles Schwab. Energy giants ExxonMobil and Chevron posted mixed results the prior Friday, with Exxon falling short of analyst estimates while Chevron topped expectations; Exxon Chief Executive Darren Woods acknowledged that disruptions tied to the Strait of Hormuz blockage had significantly affected the company's refinery capacity during the quarter, describing the period as "shaped by disruption, but defined by execution."

Elsewhere in Monday's premarket trading, GameStop shares tumbled 8.3% after the video game retailer announced agreements with existing noteholders to exchange roughly $1.4 billion in convertible debt for newly issued common stock. Marriott International shares slipped 3.5% following mixed second-quarter results that beat earnings expectations but missed revenue forecasts. Alibaba shares climbed 4.2% in premarket trading after the Chinese e-commerce giant unveiled what it described as its largest and most capable artificial intelligence model to date, a development that came alongside separate reporting from research firm Omdia noting that Chinese AI company DeepSeek's latest product offers significantly lower pricing than competing models. Gold futures were down 0.37% at $4,105.50 an ounce in early trading, while SpaceX shares were falling nearly 2% to $106.28 in premarket activity ahead of the company's earnings report.

Beyond the immediate market catalysts, investors continued weighing broader challenges expected to shape trading through the remainder of the year, including the approaching midterm elections and ongoing uncertainty about the path of Federal Reserve interest rate policy. Analysts have also flagged that August and September have historically been comparatively weak months for U.S. equities, adding a seasonal note of caution even amid the currently positive market tone driven by strong corporate earnings and the apparent de-escalation in the Iran conflict.

With a heavy slate of earnings reports and economic data still ahead this week, including Friday's closely watched jobs report, investors are likely to continue closely monitoring both corporate results and any further developments in U.S.-Iran diplomacy as key factors shaping market direction through the remainder of the trading week.