A broadcast of US President Donald Trump is shown on the floor of the New York Stock Exchange. [Getty Images]
A broadcast of US President Donald Trump is shown on the floor of the New York Stock Exchange. [Getty Images]

US stocks rallied across the board Monday after President Donald Trump held off on military action against Iran, with falling oil prices and Treasury yields quickly restoring investor confidence.

Easing concerns over AI investment — fueled by strong earnings from major tech companies — also helped drive the advance, with technology shares leading the charge. The Nasdaq Composite surged more than 2%, while the Dow Jones Industrial Average closed at an all-time high.

The Dow rose 693.38 points, or 1.32%, to close at 53,178.41 on the New York Stock Exchange on Monday. The S&P 500 gained 110.78 points, or 1.48%, to finish at 7,600.50, while the Nasdaq Composite climbed 540.04 points, or 2.13%, to end at 25,913.90. The Dow set a new closing record, and both the S&P 500 and the Nasdaq posted their third consecutive session of gains.

The rally was driven by a shift in Middle East tensions. Trump said he would hold off on the military strike against Iran he had recently threatened and instead pursue negotiations, calling it "the last chance for Iran to sign a deal." Iran denied direct talks were underway but acknowledged that consultations through Oman and discussions on normalizing passage through the Strait of Hormuz were in progress.

As hopes for de-escalation grew, fears of oil supply disruptions quickly faded. West Texas Intermediate crude futures fell 5.1% to $80.34 a barrel, while Brent crude futures dropped 4.7% to $83.77 a barrel. The decline in oil prices eased inflation concerns, pulling the yield on the 10-year US Treasury note down about 6 basis points to 4.68%. The 30-year yield also fell roughly 5 basis points to 5.23%.

Among individual stocks, large-cap technology names led the gains. Meta surged 6.02%, while Microsoft, Alphabet and Amazon each climbed more than 4%. Amazon's share price gains pushed its market cap above $3 trillion for the first time. Tesla also advanced 3.49%, though Apple slipped 1.78%.

Semiconductor stocks were broadly stronger. Nvidia rose 2.93%, AMD gained 1.78% and Micron Technology edged up 0.79%, with the Philadelphia Semiconductor Index advancing 1.06%. SanDisk jumped 6%. SK Hynix's American depositary receipts, however, fell 0.70%, following sharp declines in both Samsung Electronics and SK Hynix on the Korean stock market on Monday.

Boeing surged 8.03% after the Federal Aviation Administration certified its 737 MAX 7 aircraft. Palantir, which reported earnings after the close that beat market expectations, jumped more than 14% in after-hours trading.

Investors are watching the July nonfarm payrolls and unemployment rate, due Friday. According to financial data firm FactSet, nonfarm payrolls are expected to rise to 87,500 from 57,000 the previous month, while the unemployment rate is forecast to edge up to 4.3% from 4.2%. Before that, the June Job Openings and Labor Turnover Survey is due Wednesday, followed by the July ADP private-sector employment report on Thursday.

Market participants say confidence in AI investment has rebounded on the back of recent big-tech earnings. Jed Ellerbrooke, a portfolio manager at Argent Capital Management, told CNBC that "the market sees the massive capital expenditures by large technology companies as ultimately leading to strong returns on investment," adding that "demand for accelerated computing still far exceeds supply, and cloud companies are well positioned."


hajun825@heraldcorp.com