NEW YORK — On Monday, calm returned to the U.S. stock market as prices rose, with oil retracing its initial surge following Israel’s assaults on Iranian nuclear and military facilities at the week’s end.
The S&P 500 increased by 0.9%, reclaiming much of its losses from Friday. Similarly, the Dow Jones Industrial Average climbed by 317 points or 0.8%, while the Nasdaq composite advanced by 1.5%. This rally was part of a global rise in stock prices, ranging from Asia to Europe.
Despite ongoing hostilities between Israel and Iran, concerns linger that an extended conflict might restrict Iran’s oil supply, potentially leading to higher gasoline prices worldwide. Yet, historical patterns suggest that any spikes in crude oil prices due to regional conflicts have been short-lived, especially once it was evident the strife would not severely hamper oil flows through the narrow Strait of Hormuz.
On Monday, oil prices eased back toward $71 per barrel, buoyed by hopes that the current conflict would be equally contained.
Iran’s foreign minister, Abbas Araghchi, hinted at a potential resolution through diplomacy, indicating that a phone call from Washington to Israel could enable a return to negotiations.
Benchmark U.S. oil dipped by 1.7% to $71.77 per barrel, while Brent crude, the global standard, fell by 1.3% to $73.23, both after surging roughly 7% post-attacks on Friday.
Elsewhere, the price of gold, which had spiked as investors sought a safe haven during Friday’s unrest, retreated by 1% to $3,417.30 per ounce.
However, intersecting with these geopolitical concerns are Wall Street’s worries over President Donald Trump’s tariffs, which remain a threat to economic stability and inflation levels if trade pacts are not secured to mitigate their impact on imports.
This issue has added weight to the ongoing Group of Seven meeting in Canada, where the looming presence of tariffs overshadows discussions among the world’s largest economies.
Additionally, the Federal Reserve is poised to decide on interest rates this week, with expectations leaning towards maintaining the current rates due to uncertainty surrounding the economic impact of tariffs. While inflation has stayed relatively subdued, hovering near the Fed’s target of 2%, the focus will shift to the Fed’s fresh economic forecasts, possibly suggesting only one interest rate cut this year and multiple cuts in 2026.
The bond market saw the yield on the 10-year Treasury note rise to 4.45% from Friday’s 4.41%.
On the stock front, Sage Therapeutics soared by 35.4% following Supernus Pharmaceuticals’ announcement of its acquisition for up to $795 million. Similarly, U.S. Steel saw a 5.1% boost after President Trump’s executive order paved the way for Japanese Nippon Steel’s investment.
Conversely, defense contractors like Lockheed Martin and Northrop Grumman experienced declines after previously rising last Friday because of geopolitical tensions.
Altogether, the S&P 500 closed with a gain of 56.14 points at 6,033.11. The Dow Jones climbed 317.30 points to 42,515.09, while the Nasdaq added 294.39 points, reaching 19,701.21.
Internationally, stock indexes rose in most parts of Europe and Asia, with Hong Kong increasing by 0.7% and Shanghai by 0.3%, influenced by stronger consumer spending in China in May despite slowing factory activity and investment growth. South Korea’s Kospi jumped 1.8%, and Japan’s Nikkei 225 rose by 1.3%, marking some of the largest gains globally.