Written by: Karim Hammam
U.S. stocks rose strongly in Monday trading, recovering most of last week's losses, supported by a sharp decline in oil prices. The broad-based rally came despite the fall of Nvidia stock, one of the most influential stocks in the market.
Broad Gains for Major Indices
The S&P 500 index jumped 2.3%, achieving its second consecutive daily gain, its best daily performance since April. The index added 173.08 points to close at 7,549.94 points. The Dow Jones Industrial Average rose 1,104.02 points, or 2.2%, to reach 52,389.75 points, while the Nasdaq Composite rose 673.71 points, or 2.7%, recording 25,253.14 points.
Decline in Oil Prices Supports the Market
Stocks received a strong boost from the 5.8% drop in Brent crude prices to $92.57 per barrel, down from more than $112 at the beginning of the month. The decline came after statements by President Trump to CNN over the weekend, in which he said that resuming strikes on Iran is "highly unlikely" if negotiations make progress, while Secretary of State Marco Rubio described Iran's demands as "shameful and ridiculous" at times.
Strong Earnings Support Energy and Chip Stocks
Strong earnings reports from major companies contributed to lifting the market. Constellation Energy stock jumped 10.5% after announcing summer earnings and revenue that exceeded analyst expectations, benefiting from recent deals to supply power to major tech companies' data centers. In the artificial intelligence sector, AMD stock rose 13.3%, recovering last week's 11% losses, and CoreWeave stock rose 5.6% after falling 15.4% last week. In contrast, Nvidia stock fell 4.3% amid an investigation by the board of directors into CEO Jensen Huang regarding a personal relationship with an executive, whom the New York Times said U.S. intelligence identified as collecting information for China. The Chinese Foreign Ministry denied these accusations, describing them as "pure defamation of China's reputation."
Global Markets and Bonds
In foreign markets, indices rose in most of Europe and Asia. The French CAC 40 index rose 1.2%, and the Japanese Nikkei 225 jumped 2.3%. Gains were weaker in China and South Korea, where the Korean Kospi fell 0.8%. In the bond market, U.S. bond yields stabilized after large movements last week, with the 10-year Treasury yield rising slightly to 4.87% from 4.86%, still far from the peak of over 5.30% recorded last month.
