US stocks surge as Trump declares Iran war 'very complete'
S&P 500 erases 1.5% decline to close 0.8% higher, oil plunges on de-escalation hopes
US equities staged a dramatic turnaround on Tuesday, reversing deep losses to close firmly higher after President Donald Trump declared the US military campaign against Iran to be nearing completion.
The S&P 500 erased a 1.5% decline to finish the session up 0.8%, while the Dow Jones Industrial Average and Nasdaq Composite also moved into positive territory by the closing bell. The sharp recovery was triggered by Trump's remarks during a CBS News phone interview, in which he stated that Tehran's military capacity had been "heavily degraded" and the conflict was progressing "faster than expected."
"I think the war is very complete, pretty much," Trump said, according to a report on Benzinga. "We're very far ahead of schedule."
The president claimed that Iran's forces have been severely diminished, lacking a navy, communications, and air force, with their missiles "down to a scatter." He cited the US military hitting over 3,000 Iranian targets during the first week of operations as evidence of the campaign's effectiveness. "If you look, they have nothing left. There's nothing left in a military sense," he said.
Oil prices collapsed on hopes of de-escalation, with crude crashing from around $119 to approximately $85 per barrel. The swift decline reflected reduced geopolitical risk premium and relief over potential disruptions to the Strait of Hormuz, the critical waterway that handles roughly one-fifth of global oil supply flows.
The market's intraday reversal was among the most dramatic in recent memory, with traders scrambling to adjust positions as headlines from the White House crossed newswires. Earlier in the session, equities had been under pressure amid concerns about prolonged conflict and its economic fallout. Seven Americans have been killed in combat operations since the campaign began.
Trump warned Iran against attempting to disrupt commercial shipping through the Strait of Hormuz, stating that vessels were moving into the waterway and threatening "severe consequences" if Tehran attempted any further aggression. "They've shot everything they have to shoot, and they better not try anything cute or it's going to be the end of that country," he said.
The energy sector, which had been among the market's strongest performers in recent weeks amid rising crude prices, faced pressure following the oil price collapse. Industrials and materials shares also posted gains as investors bet that reduced geopolitical uncertainty would support broader economic activity.
Market analysts cautioned that the situation remains fluid, with the potential for sudden reversals should conditions on the ground change. However, the president's optimistic assessment provided investors with a clearer timeline for what had been an open-ended conflict, reducing one of the primary sources of uncertainty weighing on markets.
The dramatic session underscored the sensitivity of equity markets to geopolitical developments, particularly in energy-producing regions. With the conflict appearing to wind down faster than initially projected—a month-long timeline that Trump said has accelerated—investors are now reassessing the economic outlook and potential implications for Federal Reserve policy in the months ahead.