Wall Street breathed a cautious sigh of relief Monday. U.S. stocks rallied and oil prices tumbled as investors hoped Iran’s response to American airstrikes would avoid triggering a full-blown disruption to global energy supplies.

The U.S. had just launched a rare direct strike on three Iranian nuclear facilities over the weekend, marking a dramatic escalation in its involvement in the Israel-Iran conflict. But markets quickly shifted their focus—not to what the U.S. had done, but to what Iran might do next.

Stocks Rise on Hopes of De-escalation

Despite a rocky week prior, major U.S. stock indexes posted solid gains:

• The S&P 500 climbed 1%
• The Dow Jones Industrial Average rose 374 points (0.9%)
• The Nasdaq Composite added 0.9%

Much of the optimism came from signs that Iran’s retaliation—while dramatic—may have been carefully measured. Iran announced a missile strike on Al Udeid Air Base in Qatar, which is used by the U.S. military. The response was notable for its symmetry: Iran said it launched the same number of missiles as the bombs dropped by the U.S., possibly signaling an intent not to escalate further.

Oil Prices Whiplash, Then Fall Hard

Oil markets initially panicked. After trading began Sunday night, the price of crude jumped 6%, climbing past $78 a barrel. But that rally quickly reversed. As markets processed Iran’s relatively restrained response, oil prices plunged.

By late Monday:

• U.S. benchmark crude had fallen 7.2%, settling at $68.51 a barrel
• That’s nearly back to where it was before the conflict escalated over a week ago

Why the Strait of Hormuz Still Looms Large

While financial markets found some footing, one big wildcard remains: the Strait of Hormuz—a narrow but vital shipping lane off Iran’s southern coast. Roughly 20% of the world’s daily oil supply flows through this waterway, and any disruption there could send shockwaves through global markets.

Iran has long hinted at using the strait as leverage, and speculation has grown in the wake of the U.S. airstrikes. But most analysts say that’s an unlikely move—for now.

“It’s a scorched earth possibility, a Sherman-burning-Atlanta move,” said Tom Kloza, chief market analyst at Turner Mason & Co. “It’s not probable.”

Iran depends on the strait, too. It exports a significant portion of its oil through those waters, especially to China, and relies heavily on the revenue.

Still, not everyone is convinced Tehran will play it safe.

“Countries aren’t always rational,” said Andy Lipow, a veteran Houston-based oil analyst. “If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel.”

Such a spike would likely ripple through global supply chains, drive up gas prices, and complicate efforts to tame inflation.

Fed Rate Cuts? It Depends on Oil

For now, inflation in the U.S. remains relatively tame, but a surge in oil prices could reignite price pressures and derail the Federal Reserve’s plans to cut interest rates this year.

“It would be more difficult for the Fed to lower interest rates,” Lipow noted.

However, there are signs that the Fed may still lean toward easing. Fed Governor Michelle Bowman said she would support a rate cut at the central bank’s upcoming meeting—as long as inflation stays in check.

In the bond market:

• The 10-year Treasury yield slipped to 4.33% from 4.38%
• The 2-year yield, which more closely tracks Fed expectations, dropped to 3.84% from 3.90%

Tesla Boosts the S&P 500 While Hims & Hers Sinks

Back on Wall Street, Tesla was the day’s standout. Shares surged 8.2% after the company launched a test fleet of self-driving cabs in Austin, Texas—a long-promised move by CEO Elon Musk that could significantly reshape the company’s future.

On the flip side, Hims & Hers Health plunged 34.6% after Novo Nordisk pulled out of a partnership involving its blockbuster Wegovy weight-loss drug. Novo Nordisk’s U.S.-listed shares also dropped 5.5%.

Markets Snapshot

• S&P 500: ▲ 57.33 to 6,025.17
• Dow Jones: ▲ 374.96 to 42,581.78
• Nasdaq Composite: ▲ 183.56 to 19,630.97

Abroad, markets were mixed. France’s CAC 40 fell 0.7%, while Hong Kong’s Hang Seng rose 0.7%.

Source: AP News – Stocks rally and oil tumbles as Wall Street hopes for a limited retaliation after US strikes on Iran

The post Wall Street Rallies as Oil Prices Drop After Iran’s Measured Response appeared first on Journos News - Breaking News, World News, Top Stories, Todays Headlines and Flash Reports.

As Israel and Iran exchange heavy fire and the United States enters the fray with strikes on Iranian nuclear sites, some of Tehran’s most powerful allies — including Hezbollah and Iraqi militias — are conspicuously staying on the sidelines.

While these groups have long served as Iran’s frontline defense against Israel and the West, the expected retaliation from Hezbollah and its regional partners has so far been muted. For now, the war that many feared would draw in the entire Middle East remains largely contained to Iran and Israel.

Hezbollah Holds Back Despite Fiery Rhetoric

Hezbollah, once described as Iran’s most formidable regional proxy, has condemned Israel’s actions and the recent U.S. airstrikes. But condemnation has not translated into action.

Following the U.S. strikes on Iranian nuclear facilities, Hezbollah issued a strongly worded statement calling on the “Arab and Islamic world” to support Iran — but stopped short of declaring involvement or launching attacks. Just days earlier, the group’s leader, Naim Qassem, had promised Hezbollah would “act as we deem appropriate.”

So far, “appropriate” appears to mean restraint.

Lebanese government officials have urged Hezbollah to stay out of the war, warning that Lebanon cannot afford another devastating conflict. U.S. envoy Tom Barrack echoed that during a recent visit, calling any move to join the war a “very bad decision.”

Iraqi Militias Stay Silent After U.S. Strikes

In Iraq, powerful Iran-backed groups like Kataib Hezbollah have also stayed quiet — even after previously threatening to attack U.S. forces if Washington entered the conflict. Since the U.S. bombed three Iranian nuclear sites on Sunday, these militias have yet to respond.

Experts suggest that both domestic political interests and strategic caution are at play.

“Iraq’s Iran-aligned militias are now deeply connected to the state,” said Renad Mansour of Chatham House. “They’re benefiting politically and economically. They’ve seen what’s happened to Hezbollah and Iran and are worried they might be next.”

Unlike Hezbollah — which operates largely as a militant faction within Lebanon — Iraq’s main militias are officially part of the country’s defense forces, giving them a stake in maintaining national stability.

The Houthis Watch and Wait

Yemen’s Houthi rebels, another key member of the so-called “Axis of Resistance,” have also held back — at least for now.

Last month, the Houthis struck a deal with the U.S. to stop attacks on American vessels in the Red Sea in exchange for a halt in U.S. strikes on Yemen. The deal appears to be holding despite Sunday’s escalation, though the group warned it may resume attacks if the U.S. deepens its involvement in the Israel-Iran war.

In a statement after the U.S. strikes on Iran, the Houthis called the move a “grave escalation,” but did not follow through with military action.

Why They’re Holding Back

Several key factors seem to be keeping Iran’s allies on the sidelines:

• Hezbollah has been weakened militarily, especially after a brutal war with Israel last year that killed its former leader Hassan Nasrallah, cost the group much of its arsenal, and left southern Lebanon in ruins.
• Supply routes through Syria have collapsed, following the stunning fall of President Bashar Assad to rebel forces in December. “Hezbollah has been degraded at a strategic level and cut off from vital Iranian supply chains,” said Andreas Krieg of King’s College London.
• Iraqi militias and the Houthis lack the long-range strike capability to hit Israel with the kind of force Hezbollah once had.
• Iran may be signaling its proxies to remain intact and conserve strength, rather than risk being decimated in a war Tehran hasn’t fully committed to expanding.

“They’re likely lying low because Iran wants these groups to stay operational,” said Tamer Badawi, a fellow at the Center for Applied Research in Partnership with the Orient.

Still Early Days?

Despite the current restraint, some warn that escalation remains a very real risk.

“The battle is still in its early stages,” said Qassem Qassir, a Lebanese analyst with ties to Hezbollah. “Even Iran hasn’t bombed American bases — it has only targeted Israel.”

If the conflict expands or Israel or the U.S. strikes again, Iran’s regional allies may feel compelled to join in. For now, though, the Axis of Resistance appears to be waiting, watching — and weighing the costs of war.

Source: AP News – Why some key Tehran allies have stayed out of the Israel-Iran conflict

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