NEW YORK: Wall Street’s main indexes kicked off the week on a higher note on Monday after marking their biggest weekly jump in four months in the previous session, while investors assessed prospects of an end to the Middle East conflict.
Iran conveyed its response to the US proposal for ending the war to Pakistan, rejecting a ceasefire and emphasizing the necessity of a permanent end to the war, the official IRNA news agency said, ahead of US President Donald Trump’s Tuesday deadline to reopen the Strait of Hormuz.
Still, investors drew some comfort from a report that indicated the US, Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire.
“The optimism is coming from talks about a ceasefire in Iran. March was a tough month for stocks and investors really just want to find a reason to be optimistic,” said Melissa Brown, managing director of investment decision research at SimCorp.
“That’s the driver of today’s optimism but could turn into tomorrow’s concern quickly.”
The S&P 500 financial index was the biggest boost, up 0.7 percent, with JPMorgan Chase and Visa in the lead. These stocks also lifted the blue-chip Dow.
Tech stocks followed, with chip-linked firms among the top gainers. Memory chipmaker Seagate rose 6.6 percent after Morgan Stanley added it to its top-pick list. The Philadelphia SE Semiconductor index was up 0.9 percent.
“The expectation is that tech earnings will continue to be good … if the stocks have been beaten down, maybe this is a buying opportunity,” said Brown.
Mining and healthcare stocks fell 0.6 percent and 0.3 percent, respectively, capping gains.
At 11:50 a.m. ET, the Dow Jones Industrial Average rose 83.20 points, or 0.18 percent, to 46,587.48, the S&P 500 gained 16.71 points, or 0.25 percent, to 6,599.40 and the Nasdaq Composite gained 88.32 points, or 0.40 percent, to 21,967.50.
Trading volumes on Monday were expected to be thin as many markets in Europe and Asia are closed for public holidays.
Wall Street’s main indexes posted their first weekly gains in six weeks on Thursday, as the prospects of an end to the conflict soothed investor nerves.
Markets will scrutinize domestic inflation readings this week to gauge if the conflict-driven spikes in energy prices have trickled into the US economy.
Friday’s data showed US job growth rebounded more than expected in March, helping the Federal Reserve to focus on its inflation mandate. Money market participants are not pricing in any easing from the central bank this year, compared to two cuts they had expected before the war broke out, per CME Group’s FedWatch Tool.