“Oil down, stocks up” is the theme this Monday. Over the weekend, President Donald Trump called off planned large-scale strikes on Iran following appeals from regional nations. In addition, the U.S. president stated that peace talks would resume by Monday. Although Iran’s leadership denied that direct negotiations were taking place, the market decided that the risk of escalation was now significantly lower.
Brent crude oil prices took a dive and were trading in the low $80s. The Dow soared 693 points to 53,178. The Nasdaq rose 2.11% to 25,914, while the S&P 500 gained 1.48% to reach 7,600. The rally was driven largely by major technology firms, as lower oil prices and the prospect of easing supply-chain pressures changed the long-term outlook for AI profitability. AI and AI-adjacent industries rose the most, with four separate sectors posting gains of more than 1.5%.
The bond market also rallied on the prospect of lower inflation. Both the 5-year and 10-year Treasury yields declined by 6 basis points, to 4.4% and 4.69%, respectively. Gold remained flat today at just above the $4,100 mark.
Today’s economic reports reflected a highly positive environment. As technology giants continued their AI-related spending frenzy, U.S. manufacturing expanded at its fastest pace in four years. Nevertheless, tight supply chains for critical materials, such as metals, fertilizer, and computer chips, pushed prices significantly higher.
We will be watching tomorrow’s job openings figures, as well as any information coming out of the Strait of Hormuz. Adams Wealth Advisors will continue to keep you updated.