NEW YORK (AP) — A cautious relief swept through financial markets after President Donald Trump said the United States has talked with Iran about a possible end to their war. Oil prices eased Monday, and stock prices jumped on Wall Street following severe losses taken elsewhere in the world before Trump’s announcement. The S&P 500 rallied 1.1% for its best day since the war began. The Dow Jones Industrial Average rose 1.4%, and the Nasdaq composite climbed 1.4%. Brent crude fell back below $100 per barrel. But the moves were even sharper in the morning, before Iranian officials denied that talks were underway with the United States.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — A cautious relief flowed through financial markets Monday after President Donald Trump said the United States has talked with Iran about a possible end to their war. Oil prices eased, and stock prices jumped on Wall Street following severe losses taken elsewhere in the world before Trump’s announcement.

The price for a barrel of Brent crude fell 10.9% to settle at $99.94, down from nearly $120 at one point last week, after Trump said the United States and Iran held productive talks the last two days “regarding a complete and total resolution of our hostilities in the Middle East.” The S&P 500 rallied 1.7% toward its best day since the war began.

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 much more modest gain of 540 before accelerating back to a climb of nearly 870, with an hour remaining in trading.

Over the weekend, Trump had threatened to “obliterate” Iran’s power plants if it doesn’t open up the Strait of Hormuz within 48 hours. The narrow waterway off Iran's coast has become a sore point for Trump and the economy because a sharp slowdown in traffic there 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, Iranian state media cited Iranian officials as denying any talks like Trump described and said Trump had backed down “following Iran’s firm warning.”

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 vicious swings, 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 debilitating wave of inflation for the global economy.

The swings of the past few weeks are similar to, but not as dramatic 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.

Still, Monday's overriding reaction in financial markets was one of relief. The Dow Jones Industrial Average was up 861 points, or 1.9%, with an hour remaining in trading, and the Nasdaq composite was 1.8% higher.

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 disruption in the bond market were big 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 4.33% 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 7.3%, while United Airlines climbed 4.9%, and American Airlines rose 4.9%. 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 3%. It had dropped last week to 10% below its record, a sharp enough fall that professional investors call it a “correction.”

The S&P 500, which is the main measure of the U.S. stock market’s strength, pulled back within 6% 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.

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