President Donald Trump early Monday announced a 5-day pause on all U.S. strikes against Iranian energy infrastructure after reporting “very good and productive conversations” with Tehran — sending oil futures down more than 8% and Dow futures surging more than 900 points.

The development marks the sharpest de-escalation signal since Operation Epic Fury began Feb. 28.

What Did Trump Say Monday? And What Did He Say Earlier?

President Trump wrote on Truth Social Monday that the U.S. and Iran had held “very good and productive conversations” over the past two days toward “a complete and total resolution” of hostilities in the Middle East.

He said he had instructed the Department of Defense to postpone all military strikes against Iranian power plants and energy infrastructure for a five-day period, “subject to the success of the ongoing meetings and discussions.”

The remarks mark a notable shift in tone after Trump issued a 48-hour ultimatum to Tehran on Saturday, warning that failure to fully reopen the Strait of Hormuz without threats would trigger U.S. strikes on key Iranian energy assets.

"If Iran doesn't fully open, without threat, the Strait of Hormuz within 48 hours, the United States of America will hit and obliterate their various power plants, starting with the biggest one first."

However, shortly after Trump's post, Iran's Fars News Agency, said Tehran has had no direct contact with the United States, neither directly nor through intermediaries.

Oil Crashes 8% as Trump Hints Iran Ceasefire Deal

Markets didn’t wait for confirmation.

West Texas Intermediate crude plunged 8.27% to $90.10 a barrel on Monday, while Brent crude fell 7.91% to $103.31.

Both benchmarks had been trading above triple digits before the Trump’s, with Brent above $113 a barrel and WTI near $100 as Trump’s 48-hour Hormuz ultimatum neared expiration.

Since the start of the war on Feb. 28, prices have risen approximately 32.5% from a pre-war level near $68 per barrel

Futures on the S&P 500 — as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) — climbed 1.91% to 6,630.79, while the Dow Jones Industrial Average rose 2.1% to 46,530, up by 800 points.

Nasdaq 100 futures rose to 24,575, up 474 points or nearly 2%.

The moves mark the sharpest single-session relief trade since the U.S.-Israel offensive on Iran began Feb. 28.

Traders sharply repriced reopening odds following Trump’s early-Monday de-escalation post, pushing the odds for the reopening of the Strait of Hormuz by April 30 to 43%.

Travel Stocks Send The Clearest Signal

The most decisive premarket moves came from the stocks that had absorbed the war’s heaviest damage.

Delta Air Lines Inc. (NYSE:DAL), United Airlines Holdings Inc. (NASDAQ:UAL) and Southwest Airlines Co. (NYSE:LUV) were each gaining about 5% in premarket trading.

Airline earnings are disproportionately sensitive to fuel costs. Each 5% move in fuel prices translates to a 5%–10% swing in earnings-per-share for Delta and United, according to Jefferies estimates

The U.S. Global Jets ETF (NYSE:JETS) had declined by 15% since the conflict began.

Cruise lines also rallied sharply, with Carnival Corp. (NYSE:CCL) and Royal Caribbean Cruise Ltd. (NYSE:RCL) up 4.8% and 4.6%, respectively.

What Is the TACO Trade — And Does It Apply Here?

The so‑called TACO trade — short for "Trump always chickens out" — is a Wall Street playbook built on a familiar pattern in the president's key decisions: aggressive posturing that rattles markets, followed by a retreat once economic pressure rises. Investors who buy the dip during the panic are typically rewarded.

The pattern has played out before — most notably during the tariff shock of April–May 2025, as well as in episodes where Trump threatened military action against Greenland and signaled potential force against China without ultimately following through.

Monday's question was whether a five-day pause in an active conflict fits that same playbook — or whether this time is different, and the taco trade has reached its limits, at least for now.

Photo: Jeff Faughender/Courier Journal / USA TODAY NETWORK via Imagn Images