United States benchmark averages rebounded on Monday (Tuesday AEDT), supported by gains in artificial intelligence-linked companies and a modest pullback in oil prices, as investors attempted to recover from another losing week while monitoring developments in the Iran war.
The Dow Jones Industrial Average rose 387.9 points, or 0.8%, to close at 46,946.4. The S&P 500 gained 67.2 points, or 1%, to finish at 6,699.4, while the Nasdaq Composite advanced 268.8 points, or 1.2%, to settle at 22,374.2.
Technology and semiconductor stocks helped lead the rebound, particularly companies tied to the rapidly expanding artificial intelligence sector.
Meta Platforms climbed 2.3% after Reuters reported that the social media company plans to reduce its workforce by at least 20%. The cuts are intended to offset heavy spending on artificial intelligence infrastructure and prepare for productivity gains from AI-assisted employees.
Chipmaker Nvidia finished 1.6% higher after chief executive Jensen Huang unveiled new components at the company’s annual developer conference.
Tesla shares rose 1.1% after chief executive Elon Musk said the company’s Terafab project, aimed at producing artificial intelligence chips, would launch within seven days.
Meanwhile, memory chip manufacturer Micron Technology jumped 3.7% after announcing plans to build a second semiconductor manufacturing facility in Taiwan.
The gains followed a difficult period for equities. The S&P 500 recorded its third consecutive weekly loss last week and closed Friday at its lowest level of the year.
Meanwhile, crude oil prices pulled back during Monday’s session. West Texas Intermediate crude fell 5.3% to settle at US$93.50 a barrel after trading above $100 overnight. Brent crude declined 2.8% to settle at $100.21 a barrel.
The retreat came after U.S. Treasury Secretary Scott Bessent told CNBC that Washington was allowing Iranian oil tankers to pass through the Strait of Hormuz.
Oil prices were also pressured by reports that the United States is preparing to announce a coalition of countries to escort ships through the strategic waterway, citing officials familiar with the matter.
However, comments from U.S. President Donald Trump later in the day suggested the coalition had not yet been finalised.
Speaking to reporters, Trump encouraged other countries to participate in the effort to safeguard shipping routes through the strait.
Geopolitical tensions remain a key focus for markets following Trump’s order on Friday for U.S. strikes on Iranian military assets located on Kharg Island.
While the attack did not directly target oil infrastructure, the president warned that energy facilities could be considered as potential targets if Iran continues to block shipping through the Strait of Hormuz.
Despite the heightened geopolitical tensions, the recent sell-off in equities has been relatively contained. The S&P 500 remains just over 4% below the all-time high it reached earlier this year.
On the bond markets, yields edged lower. The yield on the benchmark 10-year U.S. Treasury fell 1.4% to 4.222%, while the two-year yield declined 1.5% to 3.673%.
