Oil prices dropped and major stock indexes gained on Monday on signs that US-Iran tensions were easing again, while the yen strengthened after the US and Japan confirmed joint intervention to support the currency and investors watched for signs of further intervention.

US ⁠President Donald Trump over the weekend held off on a fresh attack on Iran. Trump said on Monday that talks with Iran were under way, warning that it was a "last chance" for Tehran to sign a good deal to end the five-month-old war, but Iran denied that any negotiations were being held or planned.

Front-month Brent futures fell US$6.35, or 7.0 percent, to settle at US$83.77 a barrel, while US West Texas Intermediate (WTI) crude fell US$4.33, or 5.1 percent, to settle at US$80.34.

The Dow registered a record closing high, with optimism over earnings also helping to underpin equities.

"The sharp drop in oil prices, due to Trump's cancelling severe attacks against Iran and hopes of a diplomatic resolution, set the ball rolling this morning," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Also ⁠a plus, "so far most of the earnings have beat expectations," and guidance has been upbeat, he said. More ⁠than 300 of the S&P 500 component ⁠companies have reported earnings so far, with roughly 85 percent of firms beating expectations, according to LSEG data.

Amazon's market value topped $3 trillion for the first time on Monday, helped by a sharp rally following its recent strong earnings and signs that the AI ⁠boom is driving fresh demand for its cloud-computing services. Amazon shares ended 4.6 percent higher on the day.

The Dow Jones Industrial Average rose 693 points, or 1.3 percent, to 53,178, the S&P 500 rose 110 points, or 1.5 percent, to 7,600 and the Nasdaq Composite rose 540 points, or 2.1 percent, to 25,913.

Investors were watching for further yen intervention after Japan's finance ministry said on Monday that Japan and the US conducted coordinated yen-buying intervention and will not hesitate to take further action.

The intervention on Friday underscored both countries' resolve to prevent a selloff in the yen and Japanese government bonds from causing global spillovers.

Trump said on Sunday that the US was helping Japan prop up the yen as a sign of friendship and to help the world economy.

The Japanese currency strengthened to its strongest level against the dollar in about three months.

Elsewhere, US Treasury yields retreated as oil prices fell, even as traders continued to weigh the odds of a Federal Reserve rate hike should the war drag on.

The yield on benchmark U.S. 10-year notes fell 6.1 basis points to 4.684 percent. It reached 4.747 percent on Friday, the highest since January 2025. (Reuters)



Edited by Cecil Wong