The Dow Jones Industrial Average closed at a record high on Monday as Wall Street began August with a broad rally, helped by gains in major technology stocks and a sharp decline in oil prices following signs of easing geopolitical tensions in the Middle East.
The Dow rose about 693 points, or 1.3%, surpassing its previous record closing high from July.
The S&P 500 gained 1.5%, moving closer to its all-time high reached in early June, while the Nasdaq Composite advanced 2.1%.
The rally marked a reversal from July, when technology stocks came under pressure amid concerns over heavy spending on artificial intelligence infrastructure, uncertainty surrounding Federal Reserve policy and tensions between the United States and Iran.
Market sentiment improved after stronger-than-expected corporate earnings helped restore confidence that investments in AI infrastructure are beginning to deliver financial returns.
According to LSEG data, earnings from 304 S&P 500 companies reported through Friday showed aggregate profit growth of 29.3% year over year, with 85.2% exceeding analysts’ expectations.
Technology stocks power Wall Street higher
Communication services was the best-performing S&P 500 sector, rising more than 4%, while technology shares also posted strong gains.
Meta Platforms climbed nearly 6%, while Alphabet and Microsoft each gained around 5%.
Nvidia advanced about 3%, extending gains as investors returned to AI-related stocks.
Amazon rose more than 4%, pushing its market capitalization above the $3 trillion mark for the first time following last week’s stronger-than-expected earnings report.
Investors welcomed accelerating growth in Amazon Web Services and viewed the results as evidence that large-scale AI investments are beginning to support earnings growth.
SpaceX also traded higher ahead of its first quarterly earnings report since its public listing.
Other AI-linked companies, including Palantir, Advanced Micro Devices, SanDisk and Western Digital, remain in focus as earnings season continues this week.
Oil prices fall as Middle East tensions ease
Investor sentiment also improved after crude oil prices dropped sharply following comments from President Donald Trump that planned military strikes against Iran had been called off and discussions between the two countries would resume.
Although Iran disputed that talks were scheduled, the possibility of easing tensions reduced concerns about potential supply disruptions.
Brent crude settled about 5% lower near $83.46 per barrel, while West Texas Intermediate crude declined more than 7% to around $78.59 per barrel.
Lower oil prices also helped ease inflation concerns, pushing Treasury yields lower.
The benchmark 10-year Treasury yield fell about six basis points to around 4.68%.
Energy stocks lagged the broader market, making the sector the weakest performer of the session as declining crude prices weighed on oil producers.
Investors await jobs data and Fed signals
Attention now turns to a busy week of economic releases and corporate earnings that could shape expectations for monetary policy.
Investors are awaiting several labor market reports, including Friday’s closely watched nonfarm payrolls data, for additional clues on the health of the US economy.
Markets are currently pricing in a 66.5% probability of at least a 25-basis-point Federal Reserve rate increase in September, according to CME FedWatch data.
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