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Oil prices tumble as U.S., Iran pause strikes
Brent crude falls 6.2% to $86.01 a barrel
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Key Takeaways:
- Oil prices slipped as the U.S. and Iran refrained from fighting while discussing a possible resumption of negotiations on an interim ceasefire deal.
- The Fed meets this week, though rising inflation has dashed hopes for an interest rate cut anytime soon.
- Corporate earnings reports are focusing attention on the sustainability of broader profits from a boom in spending on artificial intelligence.
NEW YORK — Stocks rose on Wall Street on July 27 and oil prices fell after the U.S. and Iran paused their attacks while work resumed on restarting negotiations to end the war.
The Pentagon did not respond to questions about the pause in attacks on Iranian coastal areas and infrastructure after nearly two weeks of escalating fighting sparked by Iran’s firing at ships trying to transit the Strait of Hormuz.
But markets reacted with relief.
Oil prices reversed course from a week ago, when a sharp escalation in fighting between the U.S. and Iran worsened worries about global oil supplies. The price of Brent crude, the international standard, dropped 6.2% to $86.01 a barrel for October delivery. Prices surged to over $100 a barrel last week before easing.
“Oil’s sharp retreat at the Monday open did more than knock a few dollars off the barrel. It loosened the geopolitical knot that had been tightening around equities, currencies, bonds and central banks for most of July,” Stephen Innes of SPI Asset Management said in a commentary.
oil prices dropping notably after both the U.S. and Iran curb new attacks, WSJ cites dwindling munitions as possible catalyst- for now, WTI crude oil down $4/bbl, or 5% to $85, Brent down 5% to $92. RBOB down 12c/gal. where we stand now- national average could inch up, not spike. — Patrick De Haan (@GasBuddyGuy) July 26, 2026
The war between the U.S. and Iran has sharply curtailed, and at a times halted, traffic through the vital Strait of Hormuz. That has had a ripple effect throughout the world’s economy. Gasoline prices have surged and shipping costs for most goods are rising, with businesses typically passing those costs along to households.
The S&P 500 rose 0.6%. The index is coming off two weekly losses in a row. The Dow Jones Industrial Average rose 518 points, or 1%, as of 9:55 a.m. Eastern time. The Nasdaq composite rose 0.7%.
Markets rose in Europe after closing higher in Asia.
Bond yields also fell, relieving pressure from stocks. The yield on the 10-year Treasury fell to 4.65% from 4.69% late Friday.
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Wall Street got a boost from influential technology companies in the U.S. after Chinese memory chipmaker CXMT soared in its debut in Shanghai. The company jumped to become China’s most valuable listed company with an estimated market capitalization of 3.3 trillion yuan (nearly $490 billion).
Microsoft jumped 2.6% and Google's parent, Alphabet, rose 2.8%. They, and several other tech companies, are among the most valuable in the world. Their big market values give them more influence over the direction of the broader market.
Wall Street has a busy week ahead with several potential mark-moving reports. The U.S. government will release an update on consumer confidence on July 28 and inflation on July 30.
The big focus will be on the Federal Reserve, which will give an update July 29 on its interest rate policy.
AP Business Writer Elaine Kurtenbach contributed to this report.
