Markets shoot higher and oil futures sink after Trump announces progress with Iran, halt on bombing

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Wall Street shot higher and global oil futures tumbled Monday after President Donald Trump extended his deadline for Iran to reopen the crucial Strait of Hormuz and said the U.S. would hold off on strikes against Iranian power plants and other energy infrastructure for five days.

Trump's post on social media about the strikes came as the war with Iran enters its fourth week. Futures for the S&P 500 and Dow Jones Industrial Average soared 2.6% before the opening bell. Oil prices also immediately reversed course, sinking as much as 10%. Benchmark U.S. crude slid $8.23 to $90 a barrel. Brent crude, the international standard, tumbled $9.02 to $103.17 a barrel.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Global shares dipped Monday across the board, as oil prices continued to climb after U.S. President Donald Trump’s latest comments dashed hopes for an early end to the war in Iran.

France’s CAC 40 lost 1.5% in early trading to 7,548.83, while Germany’s DAX dove 2.0% to 21,944.26. Britain’s FTSE 100 fell 1.7% to 9,754.80. U.S. shares were set to drift lower with Dow futures down 0.5% at 45,659.00. S&P 500 futures fell 0.7% to 6,515.25.

In Asia, Japan’s benchmark Nikkei 225 dropped 3.5% to finish at 51,515.49. In Taiwan, the Taiex shed 2.5% to 32,722.50. Australia’s S&P/ASX 200 fell 0.7% to 8,365.90. South Korea’s Kospi dove 6.5% to 5,405.75. Hong Kong’s Hang Seng slipped 3.5% to 24,382.47, while the Shanghai Composite declined 3.6% to 3,813.28.

Trump over the weekend warned the U.S. will “obliterate” Iran’s power plants if it doesn’t fully open the Strait of Hormuz within 48 hours, prompting Tehran to say it would respond to any such strike with attacks on U.S. and Israeli energy and infrastructure assets in the region.

“Trump’s ultimatum and Iran’s retaliatory warnings point to a widening conflict that keeps energy disruption and market volatility elevated with no clear off-ramp in sight,” said Ng Jing Wen, analyst at Mizuho Bank in Singapore.

Higher oil prices, which also shook stock markets on Friday, dashed hopes for a possible upcoming cut to interest rates by the Federal Reserve, analysts said. Before the war, traders were betting that the Fed would cut rates at least twice this year. Central banks in Europe, Japan and the United Kingdom also recently held their interest rates steady.

But analysts observed that the markets were starting to react less to each of Trump’s remarks, perhaps deciding the narrative for markets was being set elsewhere, not Washington, such as what Iran might do but how global economic growth could be affected by soaring energy prices. Some Asian nations, like Japan, are vulnerable to higher energy prices.

In energy trading, benchmark U.S. crude added $1.62 to $99.85 a barrel. Brent crude, the international standard, gained $1.42 to $113.61 a barrel. The price of Brent crude has zigzagged lately from about $70 per barrel before the war began to as high as $119.50.

In currency trading, the U.S. dollar rose to 159.53 Japanese yen from 159.22 yen. The euro cost $1.1526, down from $1.1571.

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AP Business Writers Chan Ho-him in Hong Kong, and Stan Choe in New York contributed to this report.