United States benchmark averages closed slightly higher on Monday (Tuesday AEST), with enthusiasm surrounding artificial intelligence continuing to support equities even as the latest corporate earnings season neared its conclusion and geopolitical tensions in the Middle East kept investors cautious.
All three major U.S. indices ended in positive territory, with the S&P 500 and Nasdaq Composite posting fresh record closing highs.
The Dow Jones Industrial Average rose 95.3 points, or 0.2%, to 49,704.5. The S&P 500 gained 13.9 points, or 0.2%, to close at 7,412.8, while the Nasdaq Composite added 27.1 points, or 0.1%, to 26,274.1.
Investor sentiment remained influenced by developments in the Middle East after Iran submitted a new proposal to U.S. negotiators aimed at ending the months-long conflict.
President Donald Trump criticised Iran’s response in a Truth Social post on Sunday, stating it was “TOTALLY UNACCEPTABLE!”
Trump later told reporters on Monday that the month-old ceasefire between the United States and Iran was “on life support” and described the truce as “unbelievably weak”.
The uncertainty surrounding the negotiations pushed crude oil prices higher again, with Brent crude futures lifting 2.9% to US$104.21 per barrel, while West Texas Intermediate crude settled 2.8% higher at $98.07 per barrel.
Investors are now closely watching upcoming economic data releases for signs that rising energy prices may be affecting broader inflation and consumer demand.
Key reports due later this week include the Labor Department’s consumer price index (CPI) and the Commerce Department’s retail sales figures.
Producer price data and industrial production numbers are also scheduled for release and are expected to provide further insight into the strength of the U.S. economy and the inflation outlook.
Markets are also focused on President Trump’s upcoming meeting with Chinese President Xi Jinping in Beijing later this week.
Discussions are expected to cover a broad range of issues including the Iran conflict, trade relations, nuclear weapons, Taiwan, artificial intelligence and a possible extension of a rare-earth minerals agreement.
During Monday's regular session, technology stocks continued to attract buyers. Intel climbed 3.6% after surging 14% on Friday following reports of a preliminary chip manufacturing agreement with Apple.
Semiconductor company Qualcomm jumped 8.4% to a record high.
Media company Fox Corp gained 7.6% after reporting third-quarter revenue that exceeded analyst expectations.
Airline stocks, however, came under pressure as rising fuel prices threatened profit margins across the sector.
Southwest Airlines, Delta Air Lines, Alaska Air and United Airlines fell between 2.9% and 4.4%.
Investors are also preparing for another round of major corporate earnings announcements this week. Networking giant Cisco and semiconductor equipment maker Applied Materials are scheduled to report results, while Nvidia and Walmart are expected to release earnings later this month.
On the bond markets, U.S. Treasury yields moved higher, with the benchmark 10-year yield rising 1.2% to 4.412%, while the 2-year Treasury yield increased 1.6% to 3.951%.
