Oil prices tumbled on Monday amid a pause in fighting between the U.S. and Iran, with U.S. Ambassador to the United Nations Mike Waltz saying Sunday on “Face the Nation with Margaret Brennan” that the break is aimed at “giving diplomacy some space.”

Brent crude, the international benchmark, fell $6.35, or 6.6%, to $90.41 a barrel, while the U.S. benchmark, West Texas Intermediate, slipped 5.7% to $84.23. 

Stocks were mixed in morning trade. The S&P 500 fell 14 points, or 0.2%, to 7,399 points, the Dow Jones Industrial Average gained 170 points, or 0.3%, and the tech-heavy Nasdaq Composite dipped 0.5%.

The drop in oil prices comes just days after the commodity surged to more than $100 a barrel, sending gas prices above $4 a gallon and raising concerns about resurgent inflation. The renewed focus on diplomacy sent relief through the global markets, with European and Asian markets also rising on Monday.

“Oil’s sharp retreat at the Monday open did more than knock a few dollars off the barrel. It loosened the geopolitical knot that had been tightening around equities, currencies, bonds and central banks for most of July,” Stephen Innes of SPI Asset Management said in a commentary.

The average U.S. gas price on Monday was $4.11 a gallon, up from $3.88 a month ago and roughly $2.98 before the Iran war erupted in late February, according to AAA data.

“For now, motorists should expect prices to remain elevated, but the intensity of further gains will depend heavily on how the geopolitical situation develops in the coming week,” Patrick De Haan, head of petroleum analysis at tracking service GasBuddy, said in a report. 

Waltz said on “Face the Nation” that the pause in Middle East fighting is giving diplomacy “a little bit of time” to work, although he added that more U.S. military assets are still “moving into the region.” 

The Iranian regime insisted Monday that it is not engaged in any direct talks with the U.S. But after three nights of relative calm, it acknowledged ongoing talks with Oman aimed at establishing “mechanisms regarding maritime traffic” in the Strait of Hormuz. 

Recent surges in energy prices and fresh tariffs announced last week by the Trump administration could result in hotter inflation, complicating the outlook for the Federal Reserve’s interest rate policy. 

While the Fed is expected to leave interest rates unchanged at its latest meeting on Wednesday, rising oil prices have prompted investors to sharply increase their bets that a fresh rate hike could come later this year.