NEW YORK – U.S. stocks climbed sharply Monday as lower oil prices eased inflation concerns and encouraged investors to return to equities, lifting the Dow Jones Industrial Average to a record close and pushing the S&P 500 within reach of an all-time high.
The S&P 500 rose 1.5% to 7,600.50, finishing just 0.1% below its record closing level. The Dow Jones Industrial Average gained 693.38 points, or 1.3%, to a record 53,178.41, while the Nasdaq Composite advanced 2.1% to 25,913.90.
The rally followed a sharp drop in crude oil prices after President Donald Trump said over the weekend that he had postponed planned U.S. military strikes against Iran, reducing concerns about further disruption to global energy supplies.
Falling Oil Prices Boost Investor Confidence
Crude prices declined after investors viewed the latest U.S. comments as a sign that tensions in the Middle East may not escalate further.
Brent crude, the international benchmark, fell 4.7% to $83.77 per barrel.
Oil prices had fluctuated between $72 and $102 per barrel during July as fighting involving Iran raised fears of supply disruptions through the Persian Gulf. Monday’s decline helped ease worries that higher fuel costs could reignite inflation and slow economic growth.
Treasury yields also moved lower as investors reassessed inflation expectations.
The yield on the benchmark 10-year U.S. Treasury note fell to 4.68% from 4.75% on Friday, although it remained above the 3.97% level recorded before the Middle East conflict began.
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Lower Treasury yields generally reduce borrowing costs and make stocks more attractive relative to fixed-income investments.
Airlines and Industrial Stocks Lead the Rally
Transportation companies benefited from lower fuel prices.
United Airlines gained 5.8%, American Airlines rose 5%, and Norwegian Cruise Line Holdings advanced 6.6%.
Boeing climbed 8% after U.S. regulators certified the 737 MAX-7, clearing the aircraft for commercial service.
Tyson Foods added 2.8% after reporting quarterly earnings that exceeded analysts’ expectations. Chief Executive Donnie King said demand remained strong for the company’s chicken products and prepared foods, including the Jimmy Dean and Hillshire Farm brands.
Strong Earnings Continue to Support Markets
Corporate earnings remained a major driver of investor sentiment.
According to FactSet, companies in the S&P 500 are on track to report 47% year-over-year earnings-per-share growth for the spring quarter. More than half of the index’s companies have released their results.
If the pace continues, it would mark the strongest quarterly earnings growth since the spring of 2021, when the U.S. economy was recovering from the COVID-19 pandemic.
Investors also welcomed new data showing U.S. manufacturing activity expanded at its fastest pace since 2022, adding to optimism about the broader economy.
AI Stocks Remain Volatile
Technology shares continued to experience sharp swings despite Monday’s broader market rally.
Micron Technology recovered from an intraday loss of 6.4% to close 0.8% higher. The stock has gained about 190% this year.
Investors remain focused on whether major technology companies will continue spending heavily on artificial intelligence infrastructure and data centers, a trend that has fueled strong gains across semiconductor stocks.
Asian Markets End Mixed
Asian markets finished with mixed results.
South Korea’s Kospi index fell 5.1%, giving back part of Friday’s record 17.9% rally. The benchmark remains highly sensitive to movements in major technology companies, including Samsung Electronics and SK Hynix.
Japan’s Nikkei 225 declined 0.9% after U.S. and Japanese officials confirmed coordinated efforts to support the Japanese yen. A stronger yen could help ease inflation in Japan but may reduce the competitiveness of the country’s exporters.
This report is based on reporting by The Associated Press.
