Iran's Foreign Ministry swiftly rejected President Trump's claim of active peace talks—saying there had been "no direct or indirect contact" with the U.S.—but markets rallied anyway, betting on de-escalation.

Trump announced Monday a five-day halt to U.S. military strikes on Iranian energy infrastructure, citing what he described as "very good and productive conversations" toward a broader resolution of hostilities in the Middle East. He said those discussions would continue throughout the week.

Despite Tehran's denial, investors appeared to take Trump at his word, triggering a sharp relief rally across risk assets, particularly in sectors hit hardest by the conflict.

Relief Rally For Oil, Equities

By 9:40 a.m. ET energy prices fell sharply:

West Texas Intermediate dropped 8.25% to $90.13 a barrel.

Brent crude fell 8.94% to $102.16, its steepest single-session decline since the war began.

Gasoline futures fell 7.18%. Natural gas declined 4.70%.

The S&P 500, as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY), gained 1.64% to 6,613. The Dow Jones Industrial Average rose 1.81% to 46,400.

The Nasdaq-100, ...