Oil price decline eases inflation concerns, lifts U.S. stocks
Falling Brent crude prices helped calm inflation worries, prompting gains in major U.S. stock indexes while bond yields slipped.
Oil prices fell on Monday, easing market concerns that inflation could intensify and supporting a rally in U.S. equities. The S&P 500 rose 1.2%, the Dow Jones Industrial Average gained 1.1%, and the Nasdaq climbed 1.8% as Brent crude dropped 4.9% to $83.59 a barrel. The decline followed President Donald Trump’s announcement that he would postpone new strikes against Iran at the urging of regional allies, reducing fears about disruptions to global oil flows.
The easing of oil prices also helped airline stocks, with United Airlines and American Airlines each advancing about 6.7%, and Norwegian Cruise Line Holdings up 3.1%. Tyson Foods rose 3% after reporting a slightly stronger-than-expected spring profit, citing continued strength in its chicken and prepared-foods segments.
Corporate earnings are on track to rise sharply, with FactSet estimating that S&P 500 companies will post earnings per share 47% higher than a year earlier, the strongest growth since the spring of 2021. A report also showed U.S. manufacturing expansion reaching its fastest pace since 2022, adding further optimism.
However, volatility persisted in semiconductor stocks, which have been swinging on doubts about the sustainability of AI-driven revenue growth. Micron Technology, for example, moved from a 6.4% loss to a modest gain within the morning session, remaining up about 190% for the year.
Asian markets reflected mixed sentiment: South Korea’s Kospi fell 5.1% after a historic 17.9% surge, while Japan’s Nikkei 225 slipped 0.9% as the United States and Japan coordinated to support the yen, a move that could curb Japanese inflation but may pressure exporters.