Oil prices eased Monday as President Donald Trump announced that he was holding off on new military strikes against Iran, calming Wall Street’s concerns that inflation could get worse. 

U.S. stock indexes are climbing as a result, despite significant market volatility beneath the surface.

The S&P 500 rose 1% after a volatile month in July, where it oscillated as oil prices rose due to the war with Iran, and investors questioned whether Big Tech’s investments in AI would actually generate profits and whether chipmaker stocks climbed too high due to AI euphoria.

The Dow Jones Industrial Average went up 711 points, or 1.4%, as of 10:15 a.m. Eastern time, while the Nasdaq composite rose by 1.2%. 

The sharpest movement occurred in the oil market, with the price of a barrel of Brent crude falling 5.4% to $83.70 a barrel. Last month, the price of Brent crude swung between $72 and $102 as concerns grew about whether the war with Iran would allow oil tankers to leave the Persian Gulf to transport oil to customers across the globe.

Treasury yields also fell in the bond market, with the yield on the 10-year Treasury falling from 4.75% to 4.68%, although this is still above the 3.97% level from before the Iran War began.

Because Treasury yields jumped during the war with Iran, higher borrowing costs for households and businesses were threatening to drag down stock prices and slow the economy.

The drop in oil prices on Monday helped drive up stocks for airlines and heavy fuel consumers, with United Airlines shares climbing 6.7%, while American Airlines rose 6.4%.

Tyson Foods rose 1.8% after reporting a stronger profit for the spring than analysts predicted. It joins a growing list of major U.S. companies beating profit estimates, which is critical for Wall Street as stock prices tend to follow corporate earnings trends over the long term.

Companies in the S&P 500 are set to deliver earnings per share in the spring quarter 47% higher than the previous year, according to Factset, with 61% of companies already having reported their actual results. That would make the strongest growth since spring 2021, when the economy was coming out of the COVID-19 pandemic.

On the flip side, computer chip manufacturers saw losses on Monday, with stocks continuing to fluctuate sharply over concerns about whether AI boom revenues can last. If AI produces less profit and productivity than expected, Big Tech companies could limit their spending on data centers that have helped chip stocks soar.

Micron Technology fell 3.2% Monday, but its stock is still up about 180% for the year. The fluctuations for AI stocks have been most evidently reflected in South Korea, where its Kospi index is dominated by two tech companies, Samsung Electronics and SK Hynix. 

Seoul’s Kospi fell 5.1% Monday, in contrast to Friday’s surge of 17.9%, which was the biggest gain in a single day in the index’s history. 

In Japan, the country's neighbor, Tokyo’s Nikkei 225 fell 0.9% following the U.S. Treasury's assistance in buying Japanese yen to stop the currency from hitting 40-year lows. While a stronger yen could help curb inflation in Japan, it could also hurt exporters in Japan, The Associated Press reported. 

Christina Park is a reporter for Just the News. Follow her on X for more coverage.