Quick overview
Wall Street’s three major indexes closed higher on Monday, buoyed by a decline in oil prices and easing concerns over the conflict between Israel and Iran.
The Dow Jones Industrial Average, which tracks 30 large-cap U.S. companies, rose 0.75% to 42,515.09 points. The S&P 500, which reflects the performance of the largest U.S. firms, gained 0.94% to 6,033.11 points, while the tech-heavy Nasdaq Composite advanced 1.52% to 19,701.21.
Oil prices dropped more than 1% on growing expectations of a truce between Israel and Iran following several days of missile exchanges. Tehran called on the U.S. to pressure Israel into a ceasefire, in return for more flexibility in nuclear negotiations.
SPX
Market Action
On Friday, Wall Street had slumped over fears that a broader conflict in the region could disrupt global oil supply, push prices higher, and fuel inflation. However, those concerns eased as the geopolitical situation appeared to remain contained.
By sector, the strongest gains were seen in consumer discretionary, information technology, and communication services. Within the Dow Jones, most components finished higher, led by Goldman Sachs (+2.33%) and Nike (+2.26%).
Oil prices had surged more than 7% last Friday after Israel launched airstrikes on Iran. This triggered fears of a broader regional escalation, which has since somewhat subsided amid diplomatic efforts.
Oil Market Drivers – War Prospects
Tehran has asked Qatar, Saudi Arabia, and Oman to urge U.S. President Donald Trump to use his influence over Israel to broker an immediate ceasefire. In exchange, Iran has hinted at greater flexibility in its nuclear talks.
Looking ahead, markets are focused on Wednesday’s Federal Reserve policy decision. While no changes to interest rates are expected, investors will closely monitor the Fed’s statement, Chair Jerome Powell’s remarks, and updated economic projections.
“The real wildcard here is oil,” said one analyst. “Any minor geopolitical shift can have significant effects on that sector—and on the broader economy. If inflation spooks the consumer into cutting spending, it will hit earnings across the board, no matter which sector you’re in.”
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
