Oil dips 7% as Trump calls off a planned attack on Iran

Oil prices declined sharply after President Donald Trump canceled a planned attack on Iran, easing immediate concerns about further escalation in the Middle East. WTI dropped nearly 6% to around $79.65 per barrel, while Brent fell more than 5% to $83.41.

OPEC+ also agreed to increase production quotas by around 188,000 barrels per day from September, completing the unwinding of a major layer of voluntary production cuts. However, actual supply increases have remained limited because of export disruptions related to the ongoing conflict in the Middle East.

U.S. stock futures moved higher on Monday as investors prepared for the July jobs report and another busy week of corporate earnings. Dow futures gained almost 1%, while S&P 500 and Nasdaq 100 futures advanced 0.5% and 0.9%, respectively. The gains followed a positive Friday session that left the major U.S. indices near record highs.

Currency markets were also in focus after the United States joined Japan in supporting the Japanese yen, marking the first coordinated U.S.-Japan intervention to buy yen since 1998. The move came after the currency weakened to nearly 164.00 against the dollar, its lowest level in nearly four decades, before recovering sharply.

In the commodity market, Gold prices edged higher toward $4,060 during Monday‘s Asian session as investors reacted to signs of de-escalation between the United States and Iran. However, uncertainty remains elevated, with Iranian officials rejecting Trump’s claims that Tehran had requested a pause, Investors will therefore continue monitoring U.S.-Iran developments for signs of either further escalation or progress toward an agreement.

Meanwhile, Middle East tensions remain an important risk for gold. Renewed escalation could push oil prices higher, adding to inflationary pressures and potentially forcing central banks to keep interest rates elevated for longer. This could limit golds upside despite its traditional safe-haven appeal.

The main economic focus this week will be the U.S. labor market, culminating with Fridays July jobs report. Expectations point to adding 87,500 jobs, up from 57,000 in June, while the unemployment rate is forecast to rise slightly from 4.2% to 4.3%.