S&P 500 rises above the key 6,000 level as Iran tries to make peace with Israel

The S&P 500 jumped past 6,000 on Monday, sending a loud signal across Wall Street that fears of World War III may finally be cooling.

Investors had been on edge all weekend after Israel struck Iran Friday, and Tehran responded with missiles. But new reports from Reuters and the Wall Street Journal said Iran told mediators it’s willing to talk, as long as the United States doesn’t join the fight.

The Dow Jones Industrial Average rose by 494 points, equal to a 1.2% increase. The Nasdaq Composite went up 1.5%, while the S&P 500 also moved up 1.2%, now less than 2% away from its all-time record. Oil also backed off after spiking overnight.

WTI crude dropped over 1%, falling to $72.22 per barrel, after jumping past $77 earlier during Asia hours. The movement in stocks and commodities followed reports that Iran had asked Qatar, Saudi Arabia, and Oman to pressure President Donald Trump to tell Israel to agree to a ceasefire, with Iran offering flexibility in nuclear talks if that happens.

Iran says it’s open to talks if US stays out

Diplomatic signals from Tehran came after a tense weekend. Friday’s Israeli strike prompted a quick Iranian counterattack. But behind the scenes, the tone started to change. Iran told regional states it was ready to talk if Washington avoids getting involved militarily. The same Wall Street Journal report said Iran also told Israel that both sides should limit their attacks.

Despite all the weekend tension, markets didn’t behave like a world war was around the corner. Analysts pointed out that if the risk of World War 3 was even 50%, the S&P 500 would be down over 30%, gold would be trading above $5,000 per ounce, and oil would have already passed $100. If the odds were closer to 90%, they said stocks would crash 50%, gold would be over $10,000, and oil past $200. None of that is happening right now.

That’s because Iran may actually want a deal. Betting market Kalshi said chances of a US-Iran nuclear agreement by 2025 hit a record 45%. That optimism, mixed with falling oil prices, triggered a rally in risky assets. Traders jumped back into names like Tesla, which rose more than 1%, and Meta Platforms, which climbed 3%. Defense-linked companies like Palantir, often seen as benefiting from global conflict, also rose more than 3%.

Iranian lawmakers draft nuclear treaty exit bill

While Iran’s government talks about peace, its parliament is preparing for confrontation. A bill is being drafted that could take the country out of the Nuclear Non-Proliferation Treaty (NPT).

At a press briefing on Monday, Foreign Ministry spokesman Esmaeil Baghaei confirmed the draft is underway but said it’s not final. “In light of recent developments, we will take an appropriate decision,” Esmaeil said. “Government has to enforce parliament bills, but such a proposal is just being prepared, and we will coordinate in the later stages with parliament.”

Esmaeil blamed the Israeli attack on the International Atomic Energy Agency’s resolution, calling it the trigger. “Those voting for the resolution prepared the ground for the attack,” he said. He also criticized Israel, calling it “the only possessor of weapons of mass destruction in the region.”

Israel, which hasn’t signed the NPT, is historically and widely believed to have nuclear weapons, though it refuses to confirm or deny it.

Back in the US, traders were also watching economic signals. New manufacturing data came in weaker than expected on Monday morning. That didn’t stop the rally, but it did move attention to the Federal Reserve, which meets this Wednesday. Right now, the CME Group’s FedWatch tool shows traders betting on a 100% chance that Fed Chair Jerome Powell and the board keep interest rates unchanged.