U.S. stocks advanced on Monday, driven higher by a surge in artificial intelligence-related shares, while oil prices retreated amidst ongoing uncertainty stemming from Middle East conflicts.
At market close, the Dow Jones Industrial Average gained 387.94 points, or 0.83%, to finish at 387.94. The Nasdaq Composite climbed 1.22% to 22,374.18, and the S&P 500 index rose 1.01% to 6,699.38.
Leading technology stocks posted broad gains. NVIDIA saw its shares increase by 1.65% after its CEO, Jensen Huang, unveiled NVIDIA DLSS 5 during his keynote at the GTC conference. He projected that order volumes for products based on the Blackwell and Vera Rubin chip architectures would reach $1 trillion by 2027.
Meta Platforms advanced 2.33% following reports that the social media giant plans to reduce its workforce by 20%. This move is intended to offset substantial investments in AI infrastructure and prepare for efficiency gains from AI-enhanced employees.
Tesla rose 1.11% after CEO Elon Musk announced that the company's Terafab project, focused on manufacturing AI chips, would commence within seven days.
Other major tech companies also contributed to the rally. Amazon gained 1.96%, Microsoft increased by 1.11%, Apple advanced 1.08%, and Google's parent company, Alphabet, rose 0.98%.
The storage sector showed strength, with Seagate Technology, Micron Technology, and Western Digital all climbing more than 3%. This uptick followed news that Micron plans to construct a second production facility in Taiwan.
Airlines and cruise operators strengthened, buoyed by the decline in oil prices. Delta Air Lines and Norwegian Cruise Line Holdings rose 3.5% and 5.1%, respectively.
The Nasdaq Golden Dragon China Index, which tracks Chinese companies listed in the U.S., increased by 0.95%. NetEase jumped 2.74%, Pinduoduo added 1.16%, Alibaba gained 1.11%, and JD.com advanced 0.60%. In contrast, Baidu declined by 1.83%.
Crude oil prices fell, providing some relief to markets, after the U.S. indicated it would permit certain vessels from Iran, India, and China to pass through the Strait of Hormuz. However, international cooperation on securing the strait remains limited. Reports indicated that the U.S. President has again called on other nations to assist in safeguarding navigation in the Strait of Hormuz, expressing frustration over the lack of enthusiastic support from some allies.
"The news that Iranian tankers are or will be transiting the Strait of Hormuz is a positive signal for global economic stability," said Terry Sandven, Chief Equity Strategist at U.S. Bank Wealth Management. "But overall, the path ahead remains bumpy... it's still unclear when the conflict might end."
Elevated energy prices are likely to be a key topic at central bank meetings globally this week. Markets widely anticipate that the Federal Reserve will maintain its current interest rate at the conclusion of its two-day meeting on Wednesday. According to data from LSEG, traders have pushed back their expectations for at least a 25-basis-point rate cut to after October, having previously anticipated a cut in July.
"The signals from this meeting need to be viewed cautiously," said James McCann, Deputy Chief Economist at Aberdeen Standard Investments. "On one hand, a significant swing in oil prices, in either direction, could quickly alter the Fed's calculus. On the other hand, as this is one of the final meetings under Chair Powell's current term, the market might slightly discount the message he conveys."
Yields on medium- and long-term U.S. Treasury notes declined. The benchmark 10-year yield fell 6.3 basis points to 4.222%, while the 2-year yield, which reflects interest rate expectations, dropped 5.4 basis points to 3.679%.
On the economic data front, U.S. industrial production increased by 0.2% in February, slightly exceeding the forecast of 0.1%.
The NAHB/Wells Fargo Housing Market Index rose by 1 point to 38 in March, marking the 23rd consecutive month it has remained below the key expansion threshold of 50. The slight improvement in builder confidence may reflect lower mortgage rates earlier in the year, following an executive order related to government-supported mortgage entities.
International oil prices declined significantly. U.S. crude futures settled at $93.50 per barrel, down $5.21, or 5.28%. Brent crude futures settled at $100.21 per barrel, falling $2.93, or 2.84%.
Precious metals experienced volatile trading. Near the time of reporting, the COMEX April gold futures contract was trading around $5,015 per ounce, down 0.90%. COMEX silver futures declined 0.20% to $81.18 per ounce.
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