Oil prices had surged more than 7% on Friday after Israel began bombing Iran. Tehran has asked Qatar, Saudi Arabia and Oman to press Trump to use his influence with Israel to agree to an immediate ceasefire, in return for Iran’s flexibility in nuclear negotiations, sources told Reuters.
“The wild card is really what’s going to happen to oil prices … any little geopolitical move can have pretty big impacts on that sector and in this economy also,” said George Young, portfolio manager with Villere & Co in New Orleans.
“The cases that the consumer pulls in their horns and their nerves about inflation and don’t spend, well, that’s going to have a direct impact on earnings, it doesn’t matter which sector of the economy you’ve invested in.”
The Dow Jones Industrial Average rose 317.30 points, or 0.75%, to 42,515.09, the S&P 500 gained 56.14 points, or 0.94%, to 6,033.11 and the Nasdaq Composite gained 294.39 points, or 1.52%, to 19,701.21.
The Nasdaq registered its biggest daily percentage gain since May 27. Investors are also awaiting the U.S. Federal Reserve’s monetary policy decision on Wednesday, when policymakers are widely expected to keep interest rates unchanged. Money markets are largely not expecting the Fed to cut rates until September, pricing in a 61.1% chance for a cut of at least 25 basis points, according to LSEG data.
“Interest rates are still higher and so that one is a bit tough to fathom because perhaps markets are still anticipating some inflation,” said Jack Ablin, chief investment officer of Cresset Capital in Chicago.
“If nothing else, just the heightened uncertainty, combined with the tariffs is probably keeping the Fed sidelined.”
Economic data expected this week includes monthly retail sales, import prices and weekly jobless claims.
Tech and communication services led S&P sector gains while utilities was the worst performer.
The Philadelphia SE Semiconductor index jumped 3.03%, led by an 8.81% surge in Advanced Micro Devices after Piper Sandler raised its price target on the chipmaker. UPS and FedEx gained 1.1% each after the Trump Organization launched a self-branded mobile network, dubbed Trump Mobile, and named the companies as shipping partners. Shares of Sarepta Therapeutics plummeted 42.1% after the company disclosed a second case of a patient dying due to acute liver failure after receiving its gene therapy for a rare form of muscular dystrophy. U.S. Steel rose 5.1% after Trump approved Nippon Steel’s $14.9 billion bid for the company.
Advancing issues outnumbered decliners by a 1.97-to-1 ratio on the NYSE and by a 1.9-to-1 ratio on the Nasdaq.
The S&P 500 posted 16 new 52-week highs and five new lows, while the Nasdaq Composite recorded 74 new highs and 96 new lows.
Volume on U.S. exchanges was 17.86 billion shares, compared with the 18.14 billion average for the full session over the last 20 trading days.
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