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Oil prices tumble after Trump calls for easing Iran attacks
Brent crude falls 5% to $83.49 a barrel
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Key Takeaways:
- Oil prices fell sharply Aug. 3 after President Donald Trump said he would order U.S. forces to refrain from attacks against Iran and that a deal to end the fighting was near.
- The retreat in oil prices was just the latest of many big swings since the U.S. and Israel attacked Iran in late February.
- On-and-off fighting and comments from Trump about which way the conflict was heading have been the major drivers of rising and falling oil prices.
NEW YORK — Oil prices are easing on Aug. 3 and helping to calm Wall Street’s worries that inflation could potentially get even worse. That has U.S. stock indexes rising, but sharp swings are continuing to roil financial markets underneath the surface.
The S&P 500 rose 0.6% following its wild July, where it swung up and down as oil prices shot higher because of the war with Iran and worries grew about whether Big Tech’s massive investments in artificial intelligence technology will translate into profits and whether chipmaker stocks soared too high in the euphoria around AI.
The Dow Jones Industrial Average was up 624 points, or 1.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% higher.
Some of the strongest action was in the oil market, where the price for a barrel of Brent crude fell 5% to $83.49. It dropped after President Donald Trump said over the weekend that he decided to hold off on ordering U.S. forces to carry out new strikes against Iran at the urging of allies in the region.
Brent careened between $72 and $102 last month as worries rose and fell about when the war with Iran would allow oil tankers to freely exit the Persian Gulf again to deliver crude to customers worldwide.
The latest acquiescence by Trump on Iran helped to ease worries about inflation potentially getting worse, and Treasury yields correspondingly fell in the bond market.
“The U.S.A. is locked and loaded and ready to go against the Islamic Republic of Iran, at levels of Military Terror, Strength, and Power not seen since World War II. Despite this, we have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that… pic.twitter.com/Ylmlm06j3E — The White House (@WhiteHouse) August 2, 2026
The yield on the 10-year Treasury sank to 4.68% from 4.75% late July 31. It, though, remains well above its 3.97% level from before the war with Iran.
That jump is threatening to undercut prices for stocks and other investments, while slowing the economy by making borrowing more expensive for U.S. households and businesses. The average long-term U.S. mortgage rate has already leaped to its highest level in a year.
The drop in oil prices helped airlines and other companies with big fuel bills lead the market. United Airlines flew 5.6% higher, while American Airlines climbed 5.7%. Norwegian Cruise Line Holdings steamed 5.4% higher.
On the losing end of Wall Street were stocks of companies that make computer chips, which have been swinging sharply on worries about whether their surging revenues because of the AI boom are sustainable.
If AI ends up produce less profit and productivity than hoped, Big Tech companies could curtail their spending sprees on data centers that have helped chip stocks soar to tremendous heights.
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Micron Technology fell 4.9% Aug. 3 and was one of the heaviest weights on the S&P 500, but its stock is still up more than 170% for the year so far. Advanced Micro Devices fell 2.7 % to trim its surge for the year so far to 116%.
The manic swings for AI stocks have been most dramatic in South Korea, where the Kospi index is dominated by just two tech titans, Samsung Electronics and SK Hynix.
Seoul’s Kospi fell 5.1%. It was coming off a 17.9% surge from Friday, which was its best day in history.
In neighboring Japan, Tokyo’s Nikkei 225 fell 0.9% after the United States and Japan confirmed they had moved together to to prop up the value of the Japanese yen against the dollar. A stronger yen would help to limit inflation in Japan, but it could also potentially hurt Japan’s exporters.
AP Writers Matt Ott, Elaine Kurtenbach, Mayuko Ono and Mari Yamaguchi contributed to this report.
