U.S. Stock Market Sees Gains Amid Tech Surge and Falling Oil Prices
It was a positive day for U.S. stocks on Monday, showing growth as major tech companies saw advancements while oil prices and Treasury yields decreased. This comes as Wall Street tries to bounce back from a largely down week.
The S&P 500 rose by 1.3%, the Nasdaq Composite improved by 2%, and the Dow Jones Industrial Average added 325 points, translating to a 0.6% increase.
A notable factor in the market’s upward movement was the increased performance of artificial intelligence stocks. For example, Intel experienced a remarkable 13% boost, while Advanced Micro Devices gained 9%, reaching a market capitalization of $1 trillion. Other companies, such as Qualcomm, followed suit with a 6% rise.
Looking back at last week, it wasn’t as encouraging for the Dow, which fell by 1.7%—its steepest decline since March. Meanwhile, the S&P 500 dipped by about 0.1%, and only the technology-focused Nasdaq managed a slight increase of 0.7%.
The gains on Monday were also supported by a significant 5% reduction in U.S. crude prices, which edged above $95 per barrel. Similarly, the international benchmark Brent saw a 3% decline, settling above $100 a barrel.
This shift in oil prices is noteworthy, especially following recent tensions in the Middle East. Over the weekend, Iranian-aligned Houthis launched attacks on Saudi Arabia using missiles and drones. Consequently, the U.S. State Department advised citizens to reconsider travel to the Middle Eastern region, as threats of renewed attacks were exchanged between the U.S. and Iran.
Despite the escalating tensions, there seems to be a possibility for diplomatic negotiations between the U.S. and Iran, as President Donald Trump expressed willingness to meet with Iranian President Masoud Pezeshkian during this week’s UN General Assembly.
Treasury yields followed the downward trend in oil prices, with the yield on the 10-year Treasury note falling by over 3 basis points to 4.959%, and the 30-year Treasury bond yield decreasing to 5.295%.
As the U.S. grapples with persistent inflation and high bond yields, the Federal Reserve implemented an interest rate hike last week for the first time in three years.
Ed Yardeni, president of Yardeni Research, commented that higher energy prices support the case for continued tightening of financial policy. He also noted that supply risks from the ongoing Middle East conflict continue to jeopardize oil production and transportation, while sanctions on Russia compound global fuel supply challenges.
“As this situation with energy prices continues, there’s a real concern about potential inflationary spiral effects,” he added.
This context makes a significant summit between President Donald Trump and Chinese President Xi Jinping particularly relevant this week, as discussions will include topics such as AI, tariffs, and essential minerals. Treasury Secretary Scott Bessent engaged with Chinese Vice Premier He Lifeng prior to this meeting.
Jeffrey Roach, chief economist at LPL Financial, highlighted that the geopolitical tensions affecting energy costs also influence the Federal Reserve’s hawkish stance and challenge Chinese refiners. He observed that the Fed’s inflation forecasts rely on stabilized oil markets, which remains a shared concern across economic discussions in both the U.S. and China.
