Wall Street on Monday ended 1% higher in a solid rebound from a negative open, helped by a rebound in software stocks, a shift in focus to the start of the earnings season, and hopes that U.S. and Iran negotiations would continue despite failed weekend talks.
President Donald Trump said a U.S. navy blockade on the Strait of Hormuz had officially started, though he also touted the "highest number" of shipping traffic transiting the critical waterway on Sunday.
The S&P 500 improved 1% to close at 6,887.00 points, and with the gain the benchmark index has now erased all losses since the Middle East conflict began. The tech-heavy NASDAQ Composite added 1.2% to settle at 23,183.74 points, reversing a fall of as much as 0.5% earlier in the session. The blue-chip Dow Jones Industrial Average climbed 0.6% to conclude at 48,219.05 points.
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"Despite the headlines, markets are showing resilience. Investors still appear to view negotiations as a viable path forward, which has helped calm oil prices. At the same time, earnings are coming back into focus as the primary driver of this bull market, particularly within technology and AI related themes, which represent the largest share of the S&P 500 and continue to show constructive action," Keith Lerner, chief investment officer and chief market strategist at Truist, told Investing.com.
Wall Street coming off a 3% weekly gain
The main averages on Wall Street closed in mixed fashion on Friday, as caution took hold ahead of the crunch negotiations between Washington and Tehran in Pakistan. A temporary two-week ceasefire was announced last week, although it remains uncertain whether the fragile deal will lead to a permanent end to hostilities.
However, the announcement of the ceasefire sent risk appetite soaring for a second week in a row, with the S&P 500 jumping 3.6% and the Nasdaq soaring 4.7% for the week.
The mood was dampened somewhat on Friday after data showed a surge in consumer prices in March largely due to a jump in gasoline pump costs due to a war-induced energy shock. The index for energy-related prices notched its biggest monthly gain since September 2005.
Oil prices have spiked since the start of the Iran conflict in late February, driven by an effective closure of tanker traffic through the Strait of Hormuz, a narrow waterway off of Iran’s southern coast through which roughly a fifth of the world’s oil squeezes.
Trump orders Hormuz blockade after weekend talks fail Trump on Monday said a blockade to prevent ships from entering or exiting the strait had gone into effect at 10:00 ET.
Trump later said 34 ships had gone through the strait on Sunday, adding it was "by far the highest number since this foolish closure began."
"We can’t let a country blackmail or extort the world because that’s what they’re doing, they’re really blackmailing the world. We’re not going to let that happen," the president told reporters.
