Wall Street Roars Back As Iran Signals De-Escalation: Nasdaq 100 Nears All-Time High

Markets cheered Monday after Iran signaled it wants to de-escalate tensions with Israel and return to negotiations, easing geopolitical jitters that had rattled investors and sent oil prices surging last week.

A report from the Wall Street Journal revealed that Iran, facing mounting economic and military pressure, has quietly told Arab intermediaries it's open to resuming talks over its nuclear program—on the condition that the United States refrains from entering the conflict.

Reports also emerged that Iran requested Qatar, Saudi Arabia and Oman to urge President Donald Trump to pressure Israel into agreeing to an immediate ceasefire.

The overture follows days of intense Israeli airstrikes and threats from Prime Minister Benjamin Netanyahu, who remains committed to dismantling Iran’s nuclear capabilities and missile infrastructure.

Despite Netanyahu's firm stance, Tehran’s signals appear to have reignited risk sentiment, easing fears escalation of Middle East conflict and leading to a risk-on rally across global equities.

Stocks Rally, VIX Falls

The S&P 500 jumped 1.12% to 6,043 by 10:20 a.m. ET, while the Dow Jones Industrial Average climbed 1.14%, or 480 points, to 42,678.

The tech-heavy Nasdaq 100 – as tracked by the Invesco QQQ Trust (NASDAQ:QQQ) – rose 1.49% to 21,954, bringing it within just one percentage point of its all-time high.

The CBOE Volatility Index, or VIX, tumbled 10.3% to 18.8.

Gold prices dipped 1.2% to just under $3,400 an ounce, with investors rotating out of safe-haven assets and into equities.

Bitcoin (CRYPTO: BTC) soared 2.7% to above $107,000, signaling improving sentiment towards crypto.

Nasdaq 100 Sprints Toward Record High—Only 1% To Go

Tech And Consumer Stocks Lead Gains, Energy And Defense Companies Fall

Sector-wise, tech-heavy and consumer-related sectors outperformed.

The Technology Select Sector SPDR Fund (NYSE:XLK) gained 1.5% to hit a record $243 per share, while the Financial Select Sector SPDR Fund (NYSE:XLF) and Communications Services Select Sector SPDR Fund (NYSE:XLC) rose 1.4% and 1.5%, respectively.

In contrast, energy and defense stocks lagged amid declining geopolitical risk. The Energy Select Sector SPDR Fund (NYSE:XLE) tumbled 0.9%, the only S&P 500 sector in the red.

U.S. crude oil futures slid 3.4% to $70.40 per barrel, nearly erasing last Friday's 7.3% gain.

Oil explorers APA Corp. (NASDAQ:APA), Diamondback Energy Inc. (NASDAQ:FANG), and ConocoPhillips (NYSE:COP) each lost over 2%, tracking crude oil’s sharp decline.

Lockheed Martin Corp. (NYSE:LMT), a major defense contractor, fell 2.08% to $476.35.

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