On the first trading day of the week, US stocks surged as concerns stemming from Iran’s attack on Israel began to dissipate, redirecting investor attention towards corporate earnings and inflationary pressures.
The S&P 500 index (^GSPC) showcased a robust performance, climbing approximately 0.9%, while the Dow Jones Industrial Average (^DJI) soared nearly 1%, marking an impressive gain of over 360 points following last week’s tumultuous sessions. The Nasdaq Composite index (^IXIC), dominated by tech stocks, also participated in the rally, advancing 0.6%.
Investor sentiment notably shifted as initial apprehensions of an escalated conflict in the Middle East waned. Iran’s missile and drone strike on Israel over the weekend initially sparked fears of broader regional turmoil. However, diplomatic efforts by the United States to dissuade Israel from retaliatory actions helped alleviate immediate concerns, especially considering the limited scope of the attack.
Amidst the geopolitical tensions, the stock market had been grappling with lackluster corporate earnings reports and persisting worries regarding inflationary pressures. However, the tide appears to be turning as Goldman Sachs (GS) set a positive tone for the upcoming earnings season. The Wall Street titan impressed investors by surpassing first-quarter profit expectations, propelling its shares up by 5%.
In the commodities market, oil prices experienced a slight decline of about 1% on Monday after initially surging in anticipation of Iran’s military action. West Texas Intermediate crude futures (CL=F) hovered around $85 per barrel, while Brent futures (BZ=F) approached the $90 threshold.
Furthermore, the 10-year Treasury yield (^TNX) rebounded, gaining approximately 10 basis points to settle near 4.61%. This recovery follows a sharp decline observed on Friday, suggesting a resurgence towards last week’s five-month high. Conversely, gold prices (GC=F), often considered a safe-haven asset, retraced from their recent gains, slipping after reaching a peak of 1.2% amidst escalating tensions in the Middle East.
The day’s robust market performance underscores the pivotal role of strong corporate earnings in driving stocks higher and instilling confidence among investors. However, market participants remain vigilant, closely monitoring developments both domestically and abroad for potential shifts in sentiment and market dynamics.
