Stock markets stabilize post-Friday crash; U.S. equities climb and crude oil costs lessen
Wall Street took a breather on Monday as peace restored, and stocks climbed, while oil prices cooled off from their initial surge following Israel's attack on Iranian nuclear and military targets over the weekend.
The S&P 500 gained 0.9%, reclaiming most of the fall from Friday. The Dow Jones industrial average rose by 0.8%, and the Nasdaq composite improved by a solid 1.5%. These sectors joined a worldwide rally for stock prices, stretching from Asia to Europe.
Despite the ongoing conflict between Israel and Iran, worries of a broader war and potential disruptions to the flow of Iran's oil to its customers persist. In turn, this could cause gasoline prices to skyrocket worldwide and remain high.
In past conflicts in the region, spikes in crude prices prove short-lived when the fighting showed it would not disrupt the flow of oil, either Iran's or other countries' through the Strait of Hormuz off Iran's coast. Thanks to these hopes, oil prices started moving back toward $71 per barrel on Monday.
Iran's foreign minister, Abbas Araghchi, appeared to signal an outreach for the United States to intervene and negotiate an end to hostilities between Israel and Iran. He hinted at this in a post on Twitter, saying a call from Washington to Israel's leader "may pave the way for a return to diplomacy."
Oil prices experienced a slight dip, with a barrel of benchmark U.S. oil dropping 1.7% to $71.77, and Brent crude, the international standard, falling 1.3% to $73.23 per barrel. They had soared approximately 7% on Friday after the initial attacks.
In other financial market news, gold also lost some of the initial jump from Friday, when investors rushed to find someplace safe to park their cash. An ounce of gold fell 1% to $3,417.30.
Wall Street has additional concerns beyond the fighting in Iran and Israel, with President Trump's tariffs still emitting a threat to slow the economy and boost inflation if the U.S. government doesn't broker trade deals with other nations to lower Trump's taxes on imports.
With the United States meeting six of the world's largest economies in Canada for a Group of 7 meeting this week, tariffs loom over the discussions.
On Wednesday, the Federal Reserve is scheduled to deliberate regarding whether to lower or raise interest rates, with the decision due on Wednesday. The general consensus among traders and economists is that the Fed will refrain from making a move.
The Federal Reserve has been reluctant to reduce interest rates and has been on hold this year after cutting toward the end of last year because it's awaiting sight of how much Trump's tariffs will harm the economy and increase inflation. Inflation has remained relatively tame recently and is near the Fed's goal of 2%.
This week's Fed meeting might be more significant, though, for the latest set of forecasts that Fed officials will publish for where they see the economy and interest rates heading over the coming years. Economists at Bank of America claim it could show a prediction for just one cut to interest rates this year, along with three more in 2026.
In the bond market, the yield on the 10-year Treasury moved up to 4.45% from 4.41% late Friday.
On Wall Street, Sage Therapeutics skyrocketed by 35.4% for one of the market's most substantial gains following news that Supernus Pharmaceuticals planned to acquire the biopharmaceutical company in a deal worth up to a whopping $795 million, or $12 per share, if specified prerequisites are fulfilled.
U.S. Steel rose by 5.1% after Trump signed an executive order on Friday paving the path for an investment in the company by Japan's Nippon Steel. Trump will possess a unique influence over the operations of U.S. Steel under the terms of the deal.
Defense contractors, which surged on Friday, gave back some of the gains, with Lockheed Martin falling 4%, and Northrop Grumman sinking 3.7%. All told, the S&P 500 increased by 56.14 points to 6,033.11. The Dow Jones industrial average gained 317.30 points to 42,515.09, and the Nasdaq composite advanced by 294.39 points to 19,701.21.
In stock markets around the world, indexes rose across most of Europe and Asia. Stocks climbed by 0.7% in Hong Kong and 0.3% in Shanghai after data showed stronger Chinese consumer spending for May but slower growth in factory activity and investment. South Korea's Kospi climbed by 1.8%, and Japan's Nikkei 225 rallied by 1.3% for two of the world's larger gains.
- The business sector in California, along with the rest of the world, saw a rally for stock prices on Monday, with the S&P 500, Dow Jones industrial average, and Nasdaq composite all experiencing gains.
- The rise in stock prices occurred despite ongoing conflict between Israel and Iran, as concerns of a broader war and disruptions to the flow of Iran's oil persist.
- In the finance world, oil prices started moving back toward $71 per barrel on Monday, after initially soaring due to Israel's attack on Iranian nuclear and military targets.
- Iran's foreign minister, Abbas Araghchi, signaled an outreach for the United States to intervene and negotiate an end to hostilities, hinting at this in a Twitter post.
- The Federal Reserve is scheduled to deliberate on Wednesday regarding whether to lower or raise interest rates. According to economists at Bank of America, the latest set of forecasts from the Fed could show a prediction for just one cut to interest rates this year, along with three more in 2026.
- In other general-news, Sage Therapeutics skyrocketed by 35.4% following news of a potential acquisition by Supernus Pharmaceuticals, while U.S. Steel rose by 5.1% due to an investment by Japan's Nippon Steel.
