U.S. stocks opened higher on Monday evening, Beijing time. Major indices attempted to recover from last week's downward trend. Investors are closely monitoring the latest developments in the Iran conflict. The price of WTI crude oil fell back below $95 per barrel.
The Dow Jones Industrial Average rose by 386.99 points, or 0.83%, to 46,945.46. The Nasdaq Composite increased by 211.39 points, or 0.96%, to 22,316.75. The S&P 500 gained 55.33 points, or 0.83%, reaching 6,687.52.
Influenced by a report, Meta's stock rose approximately 3% in pre-market trading. The report suggested the company plans to cut over 20% of its workforce, but the company described the report as "speculative." Additionally, Nvidia's stock increased by more than 1% ahead of the opening of its GTC conference on Monday.
Previously, the S&P 500 recorded its third consecutive weekly decline and closed at its lowest level of the year on Friday. The benchmark index fell 1.6% for the week, while the Dow and Nasdaq dropped approximately 2% and 1.3%, respectively.
Oil prices rose last week, with Brent crude closing above $100 per barrel for the first time since 2022. Crude prices surged as the key shipping channel, the Strait of Hormuz, has effectively ceased transit since the outbreak of the conflict.
In early Monday trading, WTI crude fell 3% to around $95 per barrel, after trading above $100 per barrel overnight. Brent crude declined by less than 1%, to approximately $102 per barrel.
The decline in oil prices occurred as U.S. Treasury Secretary Scott Bessent stated on Monday that the United States is permitting Iranian oil tankers to pass through the Strait of Hormuz. Furthermore, U.S. officials indicated that the U.S. will soon announce the formation of a multinational coalition to escort vessels through the strait, which also contributed to pulling prices down from their highs.
On Friday, President Trump ordered strikes on Iranian military assets on Kharg Island. Although these strikes did not affect oil infrastructure, Trump stated that the U.S. would consider targeting such facilities if Iran continues to block the strait.
Over the weekend, Trump also told media that Iran wants to reach a deal, but he is not yet ready.
Jeremy Siegel of the Wharton School said on Monday, "The market believes we do have the upper hand regarding Iran, and they will reach a deal, possibly this week. Of course, there is significant tail uncertainty here, but it's fair to say... the market is certainly thinking in that direction now."
However, despite the geopolitical tensions, the stock market sell-off has been relatively mild. The S&P 500 is currently only about 5% below the all-time high it set earlier this year.
Ed Yardeni, President of Yardeni Research, wrote, "The resilience shown by the S&P 500 is attributed to the increasingly optimistic consensus earnings per share estimates from industry analysts for 2026 and 2027. Clearly, they have not yet factored in the potential negative consequences of a prolonged conflict and the closure of the strait."
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