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The market’s moves were tentative, though, after Iran denied such talks took place and Iranian parliament speaker Mohammad Bagher Qalibaf said that “fakenews is used to manipulate the financial and oil markets� in a posting on X. The Dow Jones Industrial Average went from a surge of nearly 1,135 points during the morning to a more modest gain of 540 before accelerating to finish with a climb of 631.

Over the weekend, Trump had threatened to “obliterate� Iran’s power plants if it doesn’t open up the within 48 hours. The narrow waterway off Iran’s coast has become a and the economy because a sharp slowdown in traffic is preventing oil tankers from leaving the Persian Gulf to supply customers around the world.

Trump said Monday that he is postponing attacks on Iranian power plants for five days to allow talks to continue. Quickly afterward, though, came the denials from Iran about talks, while Iran’s semiofficial Fars and Tasnim news agencies portrayed the American president as backing down.

Turkey and Egypt, meanwhile, said they had spoken to the warring parties, the first sign of coordinated mediation, which could be an encouraging signal.

Amid all the developments, the price of Brent crude fell as low as $96 immediately after Trump announced the postponement but quickly recovered a chunk of that loss. Benchmark U.S. crude had a similar reaction, immediately dropping toward $84 per barrel before yo-yoing back above $92 and then settling at $88.13, down 10.3% from Friday.

Financial markets have had both up and down, since the war began because of uncertainty about how long it may last. The fear is that a long-term disruption could keep so much oil and natural gas off global markets that it creates a punishing wave of inflation for the global economy.

The swings of the past few weeks are similar to, but not as as, those that hit last year when Trump shocked the global economy on “Liberation Day.� Many of his worldwide tariffs ended up being milder than he initially threatened, and the back-and-forth in negotiations led to historic moves up and down.

Monday’s overriding reaction in financial markets was nevertheless one of relief. The S&P 500 rose 74.52 points to 6,581.00. The Dow climbed 631.00, or 1.4%, to 46,208.47, and the Nasdaq composite jumped 299.15, or 1.4%, to 21,946.76.

In Europe, stock indexes immediately flipped from losses to gains following Trump’s announcement. France’s CAC 40 rose 0.8%, and Germany’s DAX returned 1.2%.

That compares with sharp drops for Asian stock markets, which finished trading before Trump made his announcement. South Korea’s Kospi careened 6.5% lower, Japan’s Nikkei 225 dropped 3.5% and Hong Kong’s Hang Seng fell 3.5%.

Treasury yields also eased in the bond market following Trump’s announcement. High Treasury yields and were factors that Trump named a year ago when he backed off his initial threats for global tariffs. The moves caused critics to allege Trump always chickens out, or “TACO,� if financial markets show enough pain.

Like oil prices, Treasury yields still remain well above where they were before the war began, even after Monday’s drop. The worry is that high oil prices could keep the Federal Reserve and other central banks from cutting interest rates, which would give the global economy and prices for investments a boost.

The yield on the 10-year Treasury fell to 4.35% from 4.39% late Friday. But it remains solidly above its 3.97% level from just before the war.

On Wall Street, companies with big fuel bills that will benefit from any easing of oil prices led the market. Norwegian Cruise Line Holdings surged 6.2%, while United Airlines climbed 4.5%, and American Airlines rose 3.6%. All, though, are still down for the year so far.

Stocks of smaller companies were also particularly strong, and the Russell 2000 index of smaller stocks jumped a market-leading 2.3%. It had dropped last week to 10% below its record, a sharp enough fall that professional investors have a name for it: a “correction.�

The S&P 500, which is the main measure of the U.S. stock market’s strength, pulled back within 5.7% of its own all-time high set early this year.

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AP Business Writers Yuri Kageyama, Matt Ott and Chan Ho-him contributed.