NEW YORK, United States (AFP)—Oil prices tumbled and stock markets rebounded Monday after US President Donald Trump suddenly ordered a halt to strikes on Iranian energy infrastructure after initially setting a 48-hour deadline, claiming “very good” talks with Tehran.

Crude futures plunged more than 14 percent after Trump’s comments on his Truth Social platform, but pared those losses after Iran denied any talks were taking place.

Brent closed down 10.9 percent at $99.94 per barrel, while its US equivalent West Texas Intermediate lost 10.3 percent to $88.13.

Sam Stovall of CFRA Research said the fact that Trump had specified a five-day pause on energy infrastructure strikes “means we probably could see some additional strength through this week” in the equity markets.

Asian and European stock markets had kicked off the new week with sharp losses, but Trump’s update, which came after the Asian close, saw European and US equities rally.

The rebound lost some steam after Iranian media said there had been no talks between Tehran and Washington, and London’s FTSE 100 ended the day lower as energy and defence stocks slumped.

Wall Street’s main stock indices closed up, with the S&P 500, Nasdaq Composite and Dow Jones all gaining more than one percent.

“It’s incredibly difficult to trade these markets when Trump is swinging between massive escalation and declaring peace/victory… but the market is happy for now that we do not enter a new phase of danger,” said Saxo UK investor strategist Neil Wilson.

Stovall of CFRA Research said in an environment of such high uncertainty, investors were making decisions “based on suppositions rather than facts.”

XTB research director Kathleen Brooks said that if Trump’s comments pointed to be an off-ramp from the conflict, “we could see a move back towards $90 per barrel for Brent in the coming days.”

But she added that oil would not quickly return to the pre-war levels of under $70 a barrel as it would take time to repair damaged energy infrastructure in the Gulf.

Ahead of Trump’s update, the International Energy Agency warned of the worst global energy crisis in decades.

Iran warned the Hormuz Strait “will be completely closed” should Trump act on his threat to destroy its energy infrastructure.

The 48-hour ultimatum came as the waterway — through which a fifth of global oil and liquefied natural gas flows — remains effectively closed to all but Iranian oil.

Analysts have warned of a potential inflation surge as oil prices remain far above pre-war levels despite Monday’s plunge.

That could prompt central banks hike interest rates, putting the brakes on the global economy.

Trump’s latest announcement sent the greenback lower against the euro, pound and yen.

For the markets, Stovall warned that uncertainty remained the name of the game.

“We could just as easily fall tomorrow if the president says something else that contradicts what happened today,” he said. “But I don’t think that’s going to happen.”

– Key figures at around 2015 GMT –

Brent North Sea Crude: DOWN 10.9 percent at $99.94 per barrel

West Texas Intermediate: DOWN 10.3 percent at $88.13 per barrel

New York – Dow: UP 1.4 percent at 46,208.47 points (close)

New York – S&P 500: UP 1.2 percent at 6,581.00 (close)

New York – Nasdaq Composite: UP 1.4 percent at 21,946.76 (close)

London – FTSE 100: DOWN 0.2 percent at 9,894.15 (close)

Paris – CAC 40: UP 0.8 percent at 7,726.20 (close)

Frankfurt – DAX: UP 1.2 percent at 22,653.86 (close)

Tokyo – Nikkei 225: DOWN 3.5 percent at 51,515.49 (close)

Hong Kong – Hang Seng Index: DOWN 3.5 percent to 24,382.47 (close)

Shanghai – Composite: DOWN 3.6 percent at 3,813.28 (close)

Euro/dollar: UP at $1.1616 from $1.1550 on Friday

Pound/dollar: UP at $1.3437 from $1.3323

Dollar/yen: DOWN at 158.34 yen from 159.30 yen

Euro/pound: DOWN at 86.45 pence from 86.68 pence