Wall Street Rallies to the Brink of a Record
On Monday, Wall Street moved to within striking distance of its record high, as the S&P 500 gained 1.5% and ended the session 0.4% shy of the peak it reached last month. The Dow Jones Industrial Average rose 366 points, a 0.7% gain, while the Nasdaq composite surged 2.3% to a record of its own, with chipmakers and other artificial-intelligence firms setting the pace. The widespread advance followed pullbacks in oil prices and bond yields after last week's jarring increases.[S1]
The price of a barrel of Brent crude fell 3.4% to $100.34, down from nearly $110 last week but still well above the roughly $72 seen earlier this summer. Oil has been swinging wildly as some crude from the Middle East manages to pass through the Strait of Hormuz to reach customers, though far less than the industry would like because of the war with Iran. The average U.S. price for a gallon of regular gasoline has already climbed to nearly $4.48, according to AAA, up from less than $4.32 a week earlier and $3.18 a year ago.[S1]
Bond Yields Ease but Inflation and Debt Worries Linger
Falling oil prices on Monday brought some relief to the bond market. The 10-year Treasury yield slipped to 4.95% from 5.01% at Friday's close, having pushed past the 5% mark last week for the first time since 2023. Yields had been climbing amid concerns about inflation, the heavy debt burdens carried by governments around the world and other pressures. Elevated yields weigh on the economy by driving up borrowing costs for the U.S. government as well as for households and companies.[S1]
Michael Wilson of Morgan Stanley identified a further rise in prices for oil, gasoline and other refined products as the chief short-term threat that could prevent U.S. stocks from hitting his target for the end of the year. Even so, large American corporations keep posting robust earnings growth that underpins their share prices. ING commodities strategists Ewa Manthey and Warren Patterson wrote Monday that investors locking in profits after oil's recent climb, plus optimism about this week's U.N. General Assembly talks and a planned meeting between Chinese and U.S. leaders, lifted sentiment.[S1]
AI and Crypto Stocks Lead Gains; Global Markets Climb
AI stocks strengthened after their worldwide slide at the start of last week. Industry leaders have recently warned that a slowdown in the sector's development is needed for the safety of humanity, but some analysts say the industry will remain hungry for chips. Advanced Micro Devices rallied 9.9% and reached a $1 trillion market value, while Nvidia added 2.3%. Cryptocurrency-related stocks also rose after bitcoin climbed above $86,000, returning to its January level; Coinbase Global gained 3.5% and Robinhood Markets rose 2.9%.[S1]
Warner Bros. Discovery surged 10.8% after 12 states and Hollywood writers suing over its acquisition by Paramount reached settlements. Paramount Skydance dropped 2.9%. Overall, the S&P 500 gained 114.20 points to close at 7,764.70, the Dow rose 366.19 to 52,048.83, and the Nasdaq advanced 599.55 to 27,122.09. Markets around the world also rose as oil prices and bond yields eased, with France up 0.9%, Hong Kong up 1.2% and South Korea up 1.6%.[S1]
