US stocks ended narrowly mixed on Monday, recovering from early losses following coordinated US and Israeli air strikes on Iran that rattled global markets.
Investors engaged in bargain hunting, buying the dip with strong demand for AI-focused shares, while gains in energy, technology, and defense stocks offset declines elsewhere. The Dow Jones Industrial Average fell 0.15% to 48,904.78 points, the S&P 500 rose 0.04% to 6,881.60 points, and the Nasdaq Composite gained 0.36% to 22,748.86 points.
“The overall action in the Middle East does not have a tremendous impact on the average American stock the way we measure,” said Alex Morris, CEO of F/m Investments. He added that the US market’s concentration in technology reduces sensitivity to the conflict, noting, “I just don’t think the average market participant is that moved by the conflict until the price of oil gets to $100 a barrel, which would be an emotional trigger.”
Early in the session, defense shares and energy companies benefited from the geopolitical shock, while travel and interest-sensitive sectors fell. Later, investors shifted focus to technology, evaluating the duration of the conflict and potential impacts on inflation and Federal Reserve policy.
Bill Smead, founder of Smead Capital Management, noted that investors “revert to familiar, high-performing stocks like Nvidia, the Magnificent Seven technology stocks and defense sectors” in times of uncertainty.
Nvidia (NVDA.O) gained 3% and Microsoft (MSFT.O) climbed 1.5%, helping the S&P 500 and Nasdaq recover from two-week lows reached earlier in the session.
Elsewhere, European and Asian markets struggled under the weight of rising oil prices and geopolitical uncertainty. The French and German stock markets fell over 1%, while Japan’s Nikkei 225 dropped 1.73% after plunging as much as 2% at the open.
Energy companies outperformed, benefitting from higher oil prices, while airlines and travel-related stocks suffered. Delta (DAL.N) and United Airlines (UAL.O) fell more than 2% each, and cruise operators were sharply lower, with Carnival (CCL.N) down 7.6% and Norwegian Cruise (NCLH.N) falling over 10%.
US crude prices rose 6% to US$71.23 a barrel, and Brent crude increased 6.68% to US$77.74 per barrel, following production shutdowns at several Middle Eastern oil and gas facilities.
Defense stocks also rose, with the Dow Jones U.S. Defense Index gaining amid renewed focus on military spending.
In corporate news, AES Corp (AES.N) fell 17.8% after a consortium led by BlackRock-owned Global Infrastructure Partners and private equity firm EQT AB agreed to acquire the company for $33.4 billion, below its previous closing price.
Reuters
