NEW YORK: Wall Street’s main indexes rose over 1 percent each on the first trading day of August as signs of de-escalating US-Iran tensions dragged down crude prices, while investors prepared for another week packed with earnings and economic data.
Most megacap and growth stocks gained, with Amazon.com rising 5.3 percent to cross USD3 trillion in market value for the first time.
US President Donald Trump said on Sunday that talks with Iran to reopen the Strait of Hormuz would take place sometime on Monday, though Iran contradicted him.
Brent crude prices slid 6 percent while the yield on the two-year Treasury note dipped 3.3 basis points.
Seven of the 11 S&P sectors advanced, led by communications services. Alphabet and Meta rebounded 4.7 percent and 6.7 percent, respectively, from steep declines in July.
Apple, on the other hand, shed 1.6 percent.
Amazon and Microsoft’s earnings last week alleviated some concerns about the lack of evidence of any payoff from elevated AI spending, but investors will be keen on how other major names fare.
“All the hyperscalers are continuing to spend money and are increasing the amount of capital expenditures. So I think investors are looking to see what’s the return on investment and corresponding growth in various revenue areas,” Chris Zaccarelli, chief investment officer for Northlight Asset Management, said.
AI neocloud companies such as Nebius and CoreWeave gained over 13 percent each.
SpaceX, which on Tuesday will report its first quarterly results since going public, advanced 2.3 percent. The stock has been trading below its USD135 offering price for nearly three weeks.
Other AI-linked companies reporting this week include Palantir, Advanced Micro Devices as well as data storage companies SanDisk and Western Digital .
At 11:44 a.m. ET the Dow Jones Industrial Average rose 553.78 points, or 1.06 percent, to 53,038.81, the S&P 500 gained 91.12 points, or 1.22 percent, to 7,580.84 — both near record levels. The Nasdaq Composite jumped 474.51 points, or 1.87 percent, to 25,848.37.
Wall Street had a rough July due to global concerns about the AI trajectory, future interest rates and the US-Iran conflict.
Chip stocks, which were a drag last month, were mixed on Monday, with the Philadelphia chips index down 0.1 percent. Micron lost 1.9 percent after Reuters reported that Chinese rival CXMT is considering a second memory-chip plant in Beijing.
Traders also weighed a potential consolidation in the healthcare sector after a report said Bristol Myers Squibb and AstraZeneca held preliminary merger talks. A deal could form one of the world’s biggest drugmakers, worth nearly USD400 billion. The US company’s shares gave up early gains to trade down 0.4 percent.
Hotel operator Marriott International fell 7.2 percent after forecasting third-quarter profit below expectations.
New York Federal Reserve President John Williams expressed optimismon Monday that inflation pressures would ease gradually. Late last week, a report that US Fed chair Kevin Warsh raised the idea of scheduling fewer rate-setting meetings — in line with his plan to reduce Fed rate guidance — added to uncertainties.