Dow jumps more than 200 points as oil drops following a restrained retaliation by Iran to U.S. attacks: Live updates

Stocks rose Monday, with oil prices declining, following a restrained response by Iran to U.S. attacks over the weekend.

The Dow Jones Industrial Average added 271 points, or 0.6%. The S&P 500 gained 0.7%, while the Nasdaq Composite climbed 0.8%.

The U.S. launched attacks Saturday at Iranian sites in Fordo, Isfahan and Natanz, surprising investors who were expecting more diplomacy to possibly take place after Trump said Friday that he would make a decision to attack Iran “within the next two weeks.”

Iran responded Monday by attacking an American base in Qatar, Tehran’s armed forced said. Qatar said the missiles launched by Iran were intercepted, however. Investors saw this response as more muted than anticipated.

U.S. oil lost 4% on Monday, as traders bet the crude supply wouldn’t be materially disrupted by the ongoing conflict. President Donald Trump also said in a Truth Social post that “everyone” should keep oil prices low, and doing otherwise “play into the hands of the enemy.”

“Markets only care about oil supply shocks, so as long as they stay at bay, we’ll see markets sharply higher,” said Jamie Cox, managing director at Harris Financial Group. “Regardless of whether the President oversold the effectiveness of the strikes or not, the nuclear program in Iran was set back decades.”

To be sure, Iran could target other U.S. bases or close the Strait of Hormuz, which would majorly disrupt global oil flows. In a Sunday interview with Fox News, U.S. Secretary of State Marco Rubio called for the Chinese government to step in and prevent Iran from closing the key trade route. China remains Iran’s most important oil customer.

“While Iran has flirted with closing the Strait of Hormuz, investors aren’t terribly panicked about an oil market calamity, an equanimous view that’s appropriate at this point,” wrote Adam Crisafulli of Vital Knowledge in a Monday note. “Geopolitical risks are undoubtedly elevated in the Middle East right now, but our view remains that the extreme asymmetry of the conflict (with Iran’s military capabilities, and those of its proxy partners, significantly degraded), coupled with Tehran’s relative isolation (with few, if any, allies willing to come to its assistance) and ample global oil supplies, will help keep the fallout contained.”