Falling oil prices lifted the Dow Jones Industrial Average 452 points early Monday, after the U.S. and Iran paused their fighting over the weekend. The rally comes ahead of a Federal Reserve rate decision on Wednesday and quarterly reports from four megacap technology companies.
Stocks rallied early Monday as oil prices declined. The Dow Jones Industrial Average traded 452 points higher, or 0.9%. The S&P 500 and the Nasdaq Composite each climbed 0.4%.
Crude drops more than 5% as Middle East tensions cool
International benchmark Brent crude futures for September delivery fell 6.4% to around $90.60 a barrel. U.S. West Texas Intermediate crude futures dropped 5.7% to $84.10 a barrel.
But energy companies bucked the recovery in the broader market. In pre-market trading, Chevron and ExxonMobil were each seen down 2.5%. ConocoPhillips was seen down 3.2%.
Tensions mounted elsewhere. Ukraine struck an Iranian commercial vessel in the Caspian Sea, and Tehran protested the attack to Kyiv.
Megacap earnings and the Fed meeting test the rebound
Amazon, Apple, Meta Platforms and Microsoft all report quarterly results this week, after Alphabet's disappointing results in the last week. Ken Mahoney, CEO of Mahoney Asset Management, pointed to continued artificial intelligence spending as the chief danger: “The biggest risk is the continuation of the spend.”
The central bank then takes the stage. The Fed will make its latest decision on interest rates on Wednesday, and the consensus view is a September rate hike. Yet markets are pricing in a meaningful possibility that policymakers lift the benchmark borrowing rate a quarter percentage point this week, according to the CME FedWatch Tool.
Wall Street arrives after another losing week
U.S. equities are coming off yet another losing week, as a pullback in chip stocks and uncertainty over the war with Iran weighed on investors. On Friday, the S&P 500 and the Nasdaq slid 0.6% and 2.1%, posting back-to-back weekly losses. The Dow fell 0.4%, notching a third straight week of declines.
Source: CNBC
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