U.S. stocks rise as chip makers rebound, while oil prices slip amid Middle East tensions
The S&P 500 and Nasdaq gained on Monday as AI-related chip stocks recovered, while oil prices fell and gas prices hovered around $4 per gallon amid escalating U.S.–Iran clashes.
U.S. equity indexes opened higher on Monday, with the S&P 500 up 0.6%, the Dow Jones Industrial Average gaining 190 points and the Nasdaq composite rising 0.8%. Gains were led by semiconductor and AI-related companies, including Nvidia, which added 1.6% after being the largest weight on the S&P 500 the previous week.
Domino’s Pizza jumped more than 7% after reporting second-quarter revenue that beat analysts’ estimates and announcing a new share-buyback program, although its earnings fell short of profit forecasts. AMC Entertainment surged nearly 15% in after-hours trading on record quarterly sales and profit, driven by strong box-office attendance for the film “The Odyssey.”
Oil prices reversed earlier gains as tensions between the United States and Iran intensified. Brent crude fell $1.64 to $86.46 a barrel and U.S. benchmark crude dropped $1.87 to $79.91 a barrel.
"The U.S. and Iran continue to exchange strikes, which are proving to be deadly for both sides," wrote ING commodities strategists Warren Patterson and Ewa Manthey. "If this escalation goes unchecked, we could return to an environment of wide-scale attacks across the Persian Gulf," they added. "The return to war in the Strait of Hormuz may start to weigh more heavily on financial markets before too long, especially if even strong tech earnings reports continue to be met with skepticism," said Jonas Goltermann, chief markets economist at Capital Economics.
In Europe, markets were mixed, with Britain’s FTSE 100 down 0.4% and France’s CAC 40 and Germany’s DAX each up around 0.6%. Asian markets saw divergent moves: South Korea’s Kospi fell 4.5% as Samsung Electronics and SK Hynix slipped, while Taiwan’s Taiex edged lower 0.5% even as TSMC rose 1.3% after announcing a $100 billion investment to expand U.S. chip capacity. Hong Kong’s Hang Seng gained 2.4% and Shanghai’s Composite rose 0.9%.
The day also featured the release of a new Chinese open-source AI model, Kimi K3, which analysts said could increase competition for established AI providers.