Oil Tumbles as Wall Street Reacts to Trump’s Iran De-Escalation, With Jobs Report and Big Earnings Still Ahead This Week
Oil prices dropped sharply to start the week after President Trump announced he had called off a planned military strike on Iran in favor of pursuing a diplomatic deal, giving markets a jolt of relief even as investors brace for a packed week of corporate earnings and Friday’s closely watched July jobs report.
Oil Slides on De-Escalation Hopes
Brent crude futures fell as much as 7.3% to $81.55 a barrel Monday, according to Bloomberg’s markets coverage, after Trump said over the weekend that he had agreed to call off a large-scale attack on Iran following requests from regional allies, including Saudi Arabia, to give diplomacy another chance. Treasuries and gold both rose alongside the drop in oil, a pattern consistent with investors pricing in reduced near-term geopolitical risk.
The relief in energy markets follows a volatile stretch tied directly to the on-again, off-again conflict. Just days earlier, oil had spiked on reports that Iran’s IRGC Navy struck tankers in the Strait of Hormuz and that Iran’s state-linked media had threatened attacks on energy infrastructure across Saudi Arabia, the UAE, Qatar, and Israel. Monday’s pullback reflects markets betting that Trump’s announcement — which he described as agreement on the “perimeters” of a broader deal — will hold, even though Iran had not publicly confirmed the terms as of the weekend.
How Stocks Closed Out Last Week
Monday’s session follows a strong finish to July for U.S. equities, driven largely by a wave of megacap earnings. According to Trading Economics, the S&P 500 rose 0.7% on Friday, July 31, the Nasdaq 100 gained 0.6%, and the Dow Jones Industrial Average added 277 points to close at 52,485. Amazon was the standout, jumping roughly 15% after posting stronger-than-expected cloud growth, while Alphabet climbed 7.1%, Microsoft added 3%, and Meta rose 3.3% on broader optimism around AI infrastructure spending. Apple was the notable exception, falling more than 7% after the company flagged rising memory chip costs weighing on its guidance.
For the week, the Dow and S&P 500 each gained about 1%, while the Nasdaq advanced roughly 1.6%. July as a whole was more mixed: the S&P 500 slipped 0.1% for the month and the Nasdaq declined 3.2%, while the Dow bucked the trend with a 0.3% gain, marking its fourth consecutive monthly increase, according to Trading Economics.
What’s Ahead This Week
CNBC’s outlook for the August 3-7 trading week points to a packed earnings calendar. McDonald’s, Kraft Heinz, and Costco Wholesale are all scheduled to report results, alongside Walt Disney. On the technology side, Palantir Technologies and chipmaker Advanced Micro Devices are among the additional names set to post quarterly numbers.
The earnings backdrop has been unusually strong so far this season. Of the roughly 300 S&P 500 companies that had reported by the end of July, 85% beat Wall Street expectations, according to FactSet data cited by CNBC, with aggregate corporate profits for S&P 500 companies tracking to grow more than 47% — a notably strong pace that has helped support investor sentiment despite ongoing volatility tied to the Fed and geopolitical headlines.
RBC Capital Markets strategist Lori Calvasina reiterated her S&P 500 price target of 8,150 heading into the week, telling CNBC that recent market choppiness has created some buying opportunities even as risks remain. Those risks include the approaching midterm elections and continued uncertainty over the path of interest rates, following a Federal Reserve decision in late July that saw three regional bank presidents dissent in favor of a rate hike. CNBC also flagged seasonality as a factor to watch, noting that August and September have historically been weaker months for stocks.
The Jobs Report Looms
Beyond earnings, the week’s other major catalyst is Friday’s July jobs report, which will give investors their clearest read yet on how the labor market is holding up amid the Fed’s decision to keep rates unchanged. With inflation still running above the Fed’s 2% target and the central bank’s own policymakers publicly divided on the path forward, the jobs data is likely to factor heavily into expectations for the Fed’s next meeting in September.
FAQ
Why did oil prices fall on Monday? Oil dropped after President Trump announced he had called off a planned military strike on Iran, opting instead to pursue a diplomatic agreement after Saudi Arabia and other regional allies requested more time for negotiations.
How did the stock market perform last week? The S&P 500 and Dow each gained about 1% for the week ending July 31, while the Nasdaq rose roughly 1.6%, driven largely by strong earnings from Amazon, Alphabet, Microsoft, and Meta.
What major companies are reporting earnings this week? McDonald’s, Kraft Heinz, Costco Wholesale, Walt Disney, Palantir Technologies, and Advanced Micro Devices are among the companies scheduled to report results during the week of August 3-7.
When does the July jobs report come out? The jobs report is scheduled for release on Friday, August 7, and is expected to be a key input for the Federal Reserve’s rate decision at its next meeting in September.
How has this earnings season performed overall? Of the roughly 300 S&P 500 companies that had reported by late July, 85% beat expectations, according to FactSet data, with aggregate S&P 500 profit growth tracking above 47%.
Conclusion
Monday’s drop in oil prices offers markets a measure of relief after weeks of whiplash tied to the Iran conflict, but the durability of that relief depends heavily on whether the “perimeters” of Trump’s announced deal actually hold — something Iran has yet to confirm publicly. With a stacked week of earnings from Disney, Costco, Palantir, and AMD ahead, plus Friday’s jobs report likely to shape expectations for the Fed’s September meeting, investors have plenty of fresh catalysts to parse well before the geopolitical picture fully clears.
Sources: Bloomberg, CNBC, Trading Economics (reporting dated July 31-August 3, 2026).