US stocks close higher as S&P 500, Nasdaq wipe out Iran war-driven losses on hopes for deal

Mucahithan Avcioglu

US stock markets closed higher on Monday, with the S&P 500 and Nasdaq wiping out all losses triggered by the Iran war, as investors bet Washington and Tehran could still eventually reach a deal despite a new US naval blockade targeting Iranian ports.

The Dow Jones Industrial Average rose 0.63%, or 301.68 points, to 48,218.25.

The Nasdaq Composite gained 1.23%, or 280.84 points, to 23,183.74, while the S&P 500 added 1.02%, or 69.35 points, to 6,886.24.

The advance left the S&P 500 and Nasdaq above levels seen before the war began in late February, reflecting how quickly sentiment has recovered since the US and Iran agreed to a temporary ceasefire last week and as the US earnings season got underway.

Technology shares helped lift the broader market, while sentiment improved further after US President Donald Trump said Iran had reached out to his administration and wanted an agreement, telling reporters that “they’d like to make a deal very badly.”

His remarks helped offset earlier market unease after the US moved ahead with a blockade on ships entering or leaving Iranian ports.

The market had started the week under pressure after weekend talks between the US and Iran in Islamabad ended without a breakthrough. But investors later scaled back worst-case expectations for a prolonged economic shock as signals from Washington suggested diplomatic channels remain open.

Oil prices, which had jumped earlier in the session on supply concerns tied to the Strait of Hormuz, later retreated from their highs but still remained near the $100 mark. Brent crude settled at $99.36 a barrel, while West Texas Intermediate ended at $99.08, underscoring persistent concern over Gulf energy flows.

Pakistan, Egypt, and Türkiye are expected to continue mediating between Washington and Tehran in the coming days, according to Axios, citing a regional source and a US official.

International Energy Agency Executive Director Fatih Birol said market prices have not yet fully reflected the scale of disruption on the ground.

“I agree there’s a disconnect there, but I think soon we will see that they will converge,” he said, warning of serious consequences for the global economy.

Birol also said more than 80 energy facilities in the Middle East have been damaged since the war began on Feb. 28, with more than one-third classified as severely or very severely hit, adding that restoring supplies to pre-crisis levels could take up to two years.

On the macroeconomic front, US existing home sales fell 3.6% in March to an annualized rate of 3.98 million, the lowest level in nine months.

European markets

European stock markets, by contrast, ended mostly lower. The benchmark Stoxx Europe 600 index fell 0.16% to close at 613.88 points.

Germany’s DAX 40 slipped 0.26% to 23,742.44, while France’s CAC 40 lost 0.29% to 8,235.98.

Italy’s FTSE MIB 30 declined 0.17% to 47,527.16, the UK’s FTSE 100 dropped 0.17% to 10,582.96, and Spain’s IBEX 35 declined 0.99% to 18,023.80.