U.S. stocks finish higher as tech leads rally; Dow closes at record
U.S. stocks finished higher Monday, with large-cap technology shares leading the advance and the Dow Jones Industrial Average setting a record closing high. Oil prices fell after President Donald Trump canceled a planned strike against Iran. The Dow rose 693.14 points, or 1.32%, to 53,178.17. The Nasdaq Composite gained 540.04 points, or 2.13%, to 25,913.90, while the S&P 500 rose 110.76 points, or 1.48%, to 7,600.48. Communication services and technology were the main drivers of the rally. Meta Platforms rose 6%. The supplied source also says that an unnamed company rose 4.6% and reached a record market capitalization of $3 trillion. Nvidia gained 3%; the following reference to Alphabet is incomplete in the supplied text. Monday's move marked a sharp reversal from technology stocks' volatile performance in July. The State Street Technology Select Sector SPDR ETF (XLK) fell nearly 8% during the month as investors worried about companies' artificial-intelligence spending. Large-cap technology stocks broadly advanced. Jader Ellerbrock, a portfolio manager at Argent Capital Management, said investors were turning bullish on technology again as corporate earnings exceeded expectations. "The market is digesting the expectation that the massive capital expenditures by the technology giants are generating attractive returns on investment," Ellerbrock said. "Semiconductor and data-center capital-expenditure beneficiaries doubled or more in the second quarter, then fell sharply in July, but the fundamental facts did not change throughout: Demand for accelerated computing is far greater than supply, and that gap has not narrowed." He added: "Cloud-computing giants are in a very favorable position, and semiconductors remain in a rapid-growth mode." Falling oil prices also gave the market momentum. ICE Brent crude fell 4.73% to settle at $83.77 a barrel. West Texas Intermediate futures dropped 5.11% to settle at $80.34 a barrel. Trump said over the weekend that he had canceled a planned strike against Iran and added that talks between the two countries would resume Monday. U.S. media reported Friday that, as hopes for a negotiated end to the war weakened and energy prices surged, the president was preparing another round of strikes. Michael Monahan, a partner and portfolio manager at Founder ETFs, said the signal that the United States had backed away from its earlier threats against Iran may also have helped lift stocks. He added that pressure on artificial-intelligence-related shares appeared to be easing. "The pressure from the AI selloff has disappeared, coinciding with the liquidation of 'situational awareness' last week, and, most importantly, concerns about further instability in the Middle East increased before the weekend," Monahan said. "Although that concern ebbs and flows and seems to recur every week, the tone and the broad message do seem to be saying: We will work to resolve this." Treasury yields also fell as inflation concerns eased slightly. The benchmark 10-year Treasury yield declined 6 basis points to about 4.68%. Even so, Adam Crisafulli, founder of Vital Knowledge, wrote that investors were keeping their enthusiasm in check because "we've been here before" and the conflict could still be a long way from a resolution, if one can be reached at all. Monday was the first trading day of August, and the major stock indexes were seeking to stabilize after a turbulent July.
The Dow rose 693.14 points, or 1.32%, to 53,178.17. The Nasdaq Composite gained 540.04 points, or 2.13%, to 25,913.90, while the S&P 500 rose 110.76 points, or 1.48%, to 7,600.48.
Communication services and technology were the main drivers of the rally. Meta Platforms rose 6%. The supplied source also says that an unnamed company rose 4.6% and reached a record market capitalization of $3 trillion. Nvidia gained 3%; the following reference to Alphabet is incomplete in the supplied text.
Monday's move marked a sharp reversal from technology stocks' volatile performance in July. The State Street Technology Select Sector SPDR ETF (XLK) fell nearly 8% during the month as investors worried about companies' artificial-intelligence spending.
Large-cap technology stocks broadly advanced. Jader Ellerbrock, a portfolio manager at Argent Capital Management, said investors were turning bullish on technology again as corporate earnings exceeded expectations.
"The market is digesting the expectation that the massive capital expenditures by the technology giants are generating attractive returns on investment," Ellerbrock said. "Semiconductor and data-center capital-expenditure beneficiaries doubled or more in the second quarter, then fell sharply in July, but the fundamental facts did not change throughout: Demand for accelerated computing is far greater than supply, and that gap has not narrowed."
He added: "Cloud-computing giants are in a very favorable position, and semiconductors remain in a rapid-growth mode."
Falling oil prices also gave the market momentum. ICE Brent crude fell 4.73% to settle at $83.77 a barrel. West Texas Intermediate futures dropped 5.11% to settle at $80.34 a barrel.
Trump said over the weekend that he had canceled a planned strike against Iran and added that talks between the two countries would resume Monday. U.S. media reported Friday that, as hopes for a negotiated end to the war weakened and energy prices surged, the president was preparing another round of strikes.
Michael Monahan, a partner and portfolio manager at Founder ETFs, said the signal that the United States had backed away from its earlier threats against Iran may also have helped lift stocks. He added that pressure on artificial-intelligence-related shares appeared to be easing.
"The pressure from the AI selloff has disappeared, coinciding with the liquidation of 'situational awareness' last week, and, most importantly, concerns about further instability in the Middle East increased before the weekend," Monahan said. "Although that concern ebbs and flows and seems to recur every week, the tone and the broad message do seem to be saying: We will work to resolve this."
Treasury yields also fell as inflation concerns eased slightly. The benchmark 10-year Treasury yield declined 6 basis points to about 4.68%.
Even so, Adam Crisafulli, founder of Vital Knowledge, wrote that investors were keeping their enthusiasm in check because "we've been here before" and the conflict could still be a long way from a resolution, if one can be reached at all.
Monday was the first trading day of August, and the major stock indexes were seeking to stabilize after a turbulent July.