U.S. stock indexes rallied Monday as easing Middle East tensions sent oil prices sliding and Amazon's shares pushed the company's market capitalization above $3 trillion for the first time. The move came after President Trump called off a planned strike on Iran and said talks between the two countries would resume.
The Dow Jones Industrial Average traded 613 points higher, or 1.2%, on the first trading day of August. The S&P 500 gained 1.5% in the same session. The Nasdaq Composite advanced 2.2%, with the major averages looking to stabilize after a volatile July.
Oil's slide removes an inflation headwind
Oil prices dropped after Trump said Sunday he canceled a planned attack on Iran, adding that talks between the two countries would resume Monday. Brent crude futures lost nearly 6% to trade at $83.03 a barrel. West Texas Intermediate futures slid more than 7% to $78.59 per barrel.
Cheaper crude eases inflation pressure, and that math worked for both value stocks and growth stocks alike. Treasury yields fell too, as the benchmark 10-year yield slid 7 basis points to about 4.67%.
Big Tech leads, Amazon tops $3 trillion
Meta Platforms surged nearly 7% on the day. Amazon also rose more than 6%, hitting a record $3 trillion market cap. The e-commerce giant had surged 17% last week on better-than-expected earnings. Nvidia popped 2%, while Alphabet and Microsoft each climbed around 5%.
Alphabet's advance came as the market's read on artificial-intelligence spending shifted. According to The Motley Fool, the same spending plan once criticized as heavy capital expenditure now gets credit for Google Cloud growing 82% — same company, same spending plan, a completely different market reception.
According to Bank of America Securities, the S&P 500 earnings beat rate for the second quarter is running at its highest since 2021, with 77% of companies that have reported topping analyst expectations.
More earnings due this week
The ISM Manufacturing PMI hit 55.6 in July, the best reading since May 2022, beating economists' forecast of 54.0. Caterpillar and SpaceX are both scheduled to report earnings Tuesday.
Sources: CNBC, The Motley Fool
Trading involves risk.
Risk Disclaimer
