Oil plunges 10% on Trump's Iran comments, but the chaos could continue
Angela Weiss/AFP/Getty Images
- Oil prices plunged as President Donald Trump suggests the Iran war could be over soon.
- US stock futures dip amid jittery trading on oil swings and geopolitical uncertainty.
- Asian markets are bouncing back after steep losses, but energy volatility remains high.
Oil prices plunged late Monday after President Donald Trump signaled that the Iran war may be nearing an end.
International benchmark Brent crude and US West Texas Intermediate futures were down about 10% at 9:48 p.m. ET, trading at $89.13 and $85.78 a barrel, respectively. Both had fallen as much as 11% earlier in the day.
The sharp reversal came after a dramatic surge on Sunday night, when oil futures spiked to nearly $120 a barrel amid escalating fears of supply disruptions at the Strait of Hormuz — a critical chokepoint for global crude shipments.
Prices swung wildly on Monday before settling below $100 a barrel, as traders reacted to a stream of headlines out of Washington.
In an interview with CBS News, Trump said the war is "very complete, pretty much." However, he appeared to strike a different tone in remarks to House Republicans in Miami and during a press conference later the same day, adding to market uncertainty.
US stock futures edged lower as investors weighed the mixed signals:
S&P 500 futures: 6,791.50, down 0.14%
Dow futures: 47,707.00, down 0.13%
Nasdaq futures: 24,983.50, down 0.03%
Asia markets rebound, with volatility likely to continue
Asian markets rebounded after steep losses on Monday, with investors focusing on signs that tensions may ease.
Japan's Nikkei 225 climbed 3.6%, while South Korea's Kospi jumped 6.4%.
Hong Kong's Hang Seng Index rose about 2%, and Taiwan's Taiex rose over 3%.
"The pressure valve has clearly been released for now. However, volatility across energy markets remains exceptionally elevated," wrote Chris Weston, the head of research at Pepperstone, pointing to heightened volatility levels in WTI crude.
Investors can expect significant intraday volatility to continue, including "moves that may not always make immediate sense," Weston added in his note.
"The geopolitical backdrop remains fluid, and traders should expect volatility to remain a defining feature of the trading environment in the days ahead," he wrote.