US STOCKS-Wall St set for higher open after Trump postpones strikes on Iranian power plants
By Purvi Agarwal and Twesha Dikshit
Mar 23 (Reuters) - The main U.S. indexes were on track to open higher on Monday after President Donald Trump said he would order the military to postpone strikes against Iranian power plants and energy infrastructure following "productive conversations" with Tehran.
Iran's Fars News Agency, however, disputed Trump's statement , citing a source who said there had been no direct communication with the United States, nor via intermediaries. Israel's military said it was conducting strikes on Iran.
Still, global markets staged a sharp recovery after Trump's comments, with Europe's STOXX 600 .STOXX and precious metals turning positive, while oil prices fell, signaling improving risk appetite.
Markets had been trading lower after Iran's Revolutionary Guards said Tehran would attack Israel's power plants and plants supplying U.S. bases in the Gulf if Trump carried out his threat to "obliterate" Iran's power network.
"It's exactly what the market needed to hear to sort of reprice worst case expectations. This means there is potential for the Strait of Hormuz to reopen; it's being priced in almost immediately," said Fiona Cincotta, senior market analyst at City Index.
The recovery depended on if "we get more supportive comments, particularly from Iran" that progress was being made, she said.
At 08:03 a.m. ET, Dow E-minis YMcv1 rose 653 points, or 1.42%, S&P 500 E-minis EScv1 added 85.25 points, or 1.3%, and Nasdaq 100 E-minis NQcv1 gained 312 points, or 1.29%.
The CBOE Volatility Index .VIX - Wall Street's fear gauge - retreated after earlier hitting its highest level in two weeks - and was last up 0.30 points at 27.08.
Investors trimmed bets on interest-rate hikes from the U.S. Federal Reserve after Trump's comments, and they now stand at 20% in December, compared with more than 50% before, according to CME Group's FedWatch Tool.
Markets had scaled back bets last week to show no easing was expected in 2026 after the Federal Reserve struck a hawkish tone, projecting higher inflation and a single reduction this year.
Futures tracking the Russell 2000 index .RTYc1 rose 2.5%, after being down more than 1% earlier. The small-cap index .RUT, sensitive to higher interest rates, ended more than 10% below its record close of January 22 on Friday, confirming it had been in correction territory.
Oil prices fell by more than 13% and energy stocks reversed gains. Exxon Mobil XOM.N and Chevron CVX.N lost over 1% each in premarket trading, while Occidental Petroleum OXY.N shed 4.5%.
Airlines jumped, with American Airlines AAL.N and United Airlines UAL.N adding more than 4% each.
Banks, which had sold off sharply during the conflict, inched up, with JPMorgan Chase JPM.N and Goldman Sachs GS.N adding 1.6% each.
Wall Street's main indexes had logged their fourth week of declines on Friday, with the Nasdaq posting its biggest weekly drop since early February.
Investors now await business activity surveys and consumer sentiment readings later in the week.
In individual stocks, Synopsys SNPS.O gained 4% before the bell after activist investor Elliott Investment Management built a multibillion-dollar investment in the electronic design automation firm.
