Brent falls 5.9% and U.S. stocks rise on signals from Iran over Hormuz

Key Facts

U.S. stocks rose in morning trading on Monday, November 2, as Brent crude fell 5.9% to $106.65 a barrel, according to the Associated Press. The S&P 500 was up 0.5% as of 9:35 a.m. Eastern time, while the Dow Jones Industrial Average gained 391 points, or 0.8%, and the Nasdaq Composite rose 0.7%. The agency linked the support for stocks to lower oil prices, as uncertainty persisted over the war with Iran’s impact on a return to normal activity for global industry. The moves were a snapshot of morning trading, not the session’s closing results. They came as the market sought to recover some of the previous week’s losses.

The rebound followed the S&P 500’s third consecutive losing week, according to the Associated Press, after technology and artificial intelligence stocks led declines the previous week. In Monday’s session, Alphabet rose 1.7%, recovering some of its loss of more than 12% on Thursday. Nvidia gained 1.4% after falling 4.2% on Friday. The two stocks’ moves showed a partial recovery after sharp declines in previous sessions, alongside gains in the main indexes. Those gains did not change the fact that the broader market entered the session after a run of weekly losses.

The gains extended to Asian markets on November 2; South Korea’s Kospi jumped 2.2%, while the Shanghai index rose 1.1% and Hong Kong gained 0.4%, according to the Associated Press. Among companies, United Airlines rose 5%, Southwest gained 3.2%, and cruise operator Carnival climbed 3.4%. The report said airlines and travel companies, which face large fuel bills, benefited from lower oil prices. The stocks’ performance came in the same session that Brent posted a sharp decline. Their moves put the impact of lower fuel costs at the center of the response by energy-sensitive companies, without establishing that the effect would persist in subsequent sessions.

Brent’s decline coincided with Iran’s announcement on November 2 that it had a two-day plan to reopen the Strait of Hormuz and resume nuclear talks with the United States, according to the Associated Press. The announcement came amid uncertainty over the war with Iran’s impact on restoring global industry to normal activity. The strait features in the context of oil supplies monitored by investors, while U.S. Energy Information Administration data in its September report estimated that global inventories had fallen 400 million barrels from the start of the year through that report. The agency said oil prices had remained elevated in response to the decline in global inventories. It also assumed in its forecasts that some restrictions on oil exports from the Middle East would continue through the end of 2026, and that the region’s output would remain below its pre-conflict average through the second quarter of 2027.

Input costs remain another focus in assessing the energy market. In its September report, the Institute for Supply Management’s manufacturing prices index stood at 77.9 points, up 6.8 points from August, when it was 71.1 points. The institute said raw material prices rose for the twenty-fourth consecutive month through September. These figures indicate that raw-material price pressures were present in the latest monthly reading available in the reported facts, alongside the decline in oil in Monday’s session. A one-day drop does not alter September’s historical data, nor does it by itself provide evidence of a change in the path of prices or inventories.

Investors will turn the following day to the September Job Openings and Labor Turnover report, which the U.S. Bureau of Labor Statistics is scheduled to release on November 3 at 10 a.m. Eastern time. Also due that day is the American Petroleum Institute’s weekly report on oil inventories for the week ended October 30; the institute’s schedule says its reports are usually released on Tuesdays at about 4:30 p.m. Eastern time. This is a survey-based report, not government data. The Energy Information Administration’s report, meanwhile, forecast that export restrictions would remain in place through the end of the year and that the region’s output would stay below its pre-conflict average through the second quarter of 2027. The Federal Reserve’s next meeting is scheduled for December 8 and 9, 2026.