Wall Street adds $1tn in value as AI concerns ease and oil prices fall

U.S. stock markets posted their strongest day in seven months on Monday, with the S&P 500 up 2.4%, the Nasdaq 100 gaining 3.4% and the Dow Jones Industrial Average rising 2.2%, adding roughly $1tn (£740bn) in market value. The rally was driven by expectations of falling oil prices after President Donald Trump said further strikes on Iran were “highly unlikely,” sending Brent crude down 7.9% to $90 a barrel, a ten-week low.

Bank of England Governor Andrew Bailey, speaking in Switzerland, cautioned that the financial benefits of artificial-intelligence technology could take longer to materialise than markets anticipate, likening the situation to the historic lag in commercialising electricity after Thomas Edison’s invention. > “The returns may be good, and they may match expectations, but they take longer to be realised than predicted,” Bailey said.

The optimism came despite recent concerns that the AI boom could falter, which had pushed the Nasdaq 100 to its steepest decline since 2020 following the Democrats’ midterm election win. The Philadelphia Semiconductor Index rose as much as 7% and Nvidia’s founder Jensen Huang’s personal controversy did not prevent a broader market advance, although Nvidia shares fell up to 8%.

Morgan Stanley analyst Chris Larkin said there is “good reason to believe the stock market’s long-term rally is intact,” while Goldman Sachs chief executive David Solomon noted that “the market is open and transactions are happening.”

Some strategists warned that the recent pull-back could signal a shift in investor sentiment. JP Morgan’s Dubravko Lakos-Bujas described the decline as “the largest unwind of long momentum against the market in about 40 years,” and UBS’s Ulrike Hoffmann-Burchardi suggested investors might use the dip in AI-related stocks to rebalance portfolios and diversify across sectors and regions.