US equities were trading higher during Monday's midday session as investors weighed the impact of a pause in hostilities between the United States and Iran. However, selling pressure on chipmakers, with investors reducing positions in Micron Technology and other AI-related stocks, limited the broader market's gains.
The Dow Jones Industrial Average rose 230.68 points, or 0.44%, to 52,106.79. The Nasdaq Composite gained 371.60 points, or 1.47%, to 25,669.22, and the S&P 500 increased 61.06 points, or 0.83%, to 7,415.08.
Micron Technology shares fell nearly 8%, hitting their lowest point in about two weeks. Another memory chipmaker, SanDisk, dropped 8.4%, while Intel declined 5.3%. Jed Ellerbroek, a portfolio manager at Argent Capital Management, noted that some of the market's turbulence stemmed from the pullback in memory chip stocks, led by Micron. He pointed out that the current environment represents one of the largest momentum markets in decades, where such momentum stocks are likely to be exceptionally volatile.
Meanwhile, shares of Comcast surged 9% after the company announced plans to separate its media and technology businesses into two independent, publicly traded companies, a process expected to be completed within about a year. Alphabet shares also rose more than 4% in Monday trading, with the market reacting positively to its inclusion in the Dow Jones Industrial Average.
The United States and Iran reached an agreement on Sunday to pause hostilities and allow commercial vessels free passage through the Strait of Hormuz. This followed a weekend of military exchanges that had threatened to derail negotiations aimed at ending the conflict. A US official stated that technical talks on all areas of a memorandum of understanding would proceed as planned, with both sides currently exercising restraint and vessels able to pass freely.
Oil prices moved higher at the start of the week as traders assessed whether the ceasefire would hold and if it would ease concerns over energy supply disruptions. International benchmark Brent crude rose 1.2% to $72.87 per barrel, while West Texas Intermediate futures gained 1.7% to $70.38. Adam Crisafulli, an analyst at Vital Knowledge, noted that neither side appears eager to resume full-scale hostilities, and the overall process may still be moving toward a sustained de-escalation.
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