U.S. stocks surged on Monday, driven by falling oil prices and a rebound in technology shares following last week's turbulence.
At the close, the Dow Jones Industrial Average jumped 1,104.02 points, or 2.15%, to 52,389.75. The Nasdaq Composite climbed 2.74% to 25,253.14, while the S&P 500 rose 2.35% to 7,549.94, marking its best performance since April 8.
Star Stocks Put In a Broad Rally
Major technology names posted widespread gains, with Tesla and Meta each rising more than 5%. Amazon, Microsoft, and Apple all gained over 2%.
Shares of NVIDIA (NASDAQ: NVDA) fell 4.27% to a seven-month low, weighed down by reports that CEO Jensen Huang is the subject of an internal company investigation.
Chipmakers rallied sharply, with the Philadelphia Semiconductor Index surging roughly 7%. Advanced Micro Devices (NASDAQ: AMD) soared more than 13%, and Applied Materials jumped over 11%. Memory chip stocks also performed well, with SK Hynix, Micron Technology, and SanDisk each up more than 5%, while Seagate Technology and Western Digital gained over 9%.
The optical communication sector surged dramatically, with Coherent rising 16.79% and Lumentum gaining 10.69%.
Investment giant KKR saw its shares rise 1.67% after reporting record quarterly profits. Constellation Energy, an energy company involved in AI infrastructure buildout, saw its stock surge more than 10% after adjusted third-quarter profits beat expectations. Berkshire Hathaway Class A shares slipped 0.36% after the conglomerate reported a decline in third-quarter profits.
The Nasdaq Golden Dragon China Index dropped 1.32%, with Alibaba, Pinduoduo, and JD.com each falling more than 2%. Baidu declined 1.03%, while NetEase bucked the trend with a gain of 0.15%.
Market Overview
The market attempted a partial rebound from a brutal AI-driven selloff, with chip stocks bouncing back on fresh buying interest. However, concerns lingered following strong Democratic midterm results, as investors worried that stricter regulation of data center construction, energy usage, and development costs could slow the AI infrastructure boom.
Jay Hatfield, CEO of Infrastructure Capital Advisors, said last week's "chip selloff" was somewhat overdone. However, it was "partly right," because in the short term there is certainly a policy threat from Democrats, but more importantly, the specific impact needs to be viewed from a longer-term perspective beginning in 2028.
This week, investors are looking ahead to key AI-related earnings reports. Results from CoreWeave, Cisco, and Applied Materials will be used to assess the outlook for technology and whether the recent selloff will continue.
"If people are worried about the AI story, this story isn't going away, and Democrats aren't going to destroy AI. They can't. AI has a life of its own. They can impose regulation on it, but they certainly won't stop it," said Ken Polcari, partner and chief market strategist at SlateStone Wealth.
Meanwhile, the market will also be watching Tuesday's Consumer Price Index and Friday's Producer Price Index releases for clues on the Federal Reserve's next move. Despite a pullback in oil prices, according to CME FedWatch data, expectations for a rate hike at the Fed's December policy meeting remain above 80%, with October's strong jobs report giving the central bank room to continue raising rates.
On Monday, Richmond Fed President Thomas Barkin said the Fed should be "cautious" in setting monetary policy as it plans its approach to inflation.
Medium- and long-term Treasury yields edged lower, with the 2-year note, closely tied to rate expectations, dipping 0.2 basis points to 4.519%, while the 10-year yield fell 0.4 basis points to 4.854%.
On the Middle East front, according to CCTV News, U.S. President Trump said in a media interview on the 8th that as long as U.S.-Iran negotiations make progress, the United States is "extremely unlikely" to resume large-scale military action against Iran. However, he also emphasized that U.S. forces in the Middle East are "ready" and did not rule out the possibility of renewed military action.
Ole Hansen, head of global commodity strategy at Saxo Bank in Denmark, said market expectations for a peace deal between the U.S. and Iran are pushing oil prices lower, and Trump's related remarks have further increased downward pressure on oil prices.
Commodities Performance
International oil prices fell sharply as the market focused on the prospects for renewed U.S.-Iran peace talks. U.S. West Texas Intermediate futures dropped 4.38% to settle at $86.85 per barrel. International benchmark Brent fell 5.85% to $92.57 per barrel.
Precious metals rebounded, with the near-month Comex gold futures contract for November delivery rising $40.50 per ounce, or 1.00%, to settle at $4,105.00.
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