Stocks Rise Oil Prices Fall as Israel-Iran Conflict Eases

U.S. stocks rallied and oil prices fell early Monday as investors grew optimistic that the Israel-Iran conflict would not escalate into a wider regional war affecting oil supplies. The Dow Jones, S&P 500, and Nasdaq all erased most of the losses from the previous week, while U.S. oil benchmarks dropped about 4% after surging as much as 10% following Israel's surprise airstrikes on Iranian nuclear and military sites. Analysts noted that most attacks avoided critical Iranian energy infrastructure, limiting damage and easing fears of major disruptions to crude flows. The recent decision by OPEC+ to increase oil production in July also contributed to stabilizing prices. Market participants remain cautious ahead of Wednesday's Federal Reserve interest rate decision, focusing on Fed Chair Jerome Powell's comments amid expectations for a potential rate cut later in the year. Despite ongoing missile exchanges, investors appear less fearful of the conflict spreading beyond Israel and Iran, helping restore risk appetite in global markets.