Wall Street extended its winning streak, with the Dow Jones Industrial Average closing at a record high and the Nasdaq recording its biggest one-day gain since late March after a preliminary agreement between the United States and Iran sent oil prices sharply lower.
The easing in geopolitical tensions and expectations of renewed oil flows through the Strait of Hormuz helped calm inflation concerns, prompting investors to rotate back into growth and technology shares.
The Dow rose 468.77 points, or 0.92%, to 51,671.03, while the S&P 500 climbed 1.65% to 7,554.29. The Nasdaq Composite outperformed with a 3.07% jump to 26,683.94, marking its strongest daily advance since March 31.
Gene Goldman, chief investment officer at Cetera Investment Management, said: “Markets are higher on a classic relief rally. We have a US-Iran deal that’s driving oil sharply lower. This is easing inflation fears and basically pushing investors back into risk assets like technology.”
US crude futures settled 4.9% lower and touched their lowest level since March, benefiting industries sensitive to fuel costs. Airline shares advanced, with United Airlines rising 3.9%, while cruise operators Norwegian Cruise and Carnival gained 3.7% and 3.2% respectively.
Technology emerged as the best-performing sector in the S&P 500, climbing 3.4%, while energy stocks lagged with a 3.6% decline. The Philadelphia Semiconductor Index surged more than 5% to a record close after rebounding from a correction earlier this month.
Nvidia gained 3.5%, while Micron Technology jumped 10.5% after several brokerages raised their price targets on the memory chip maker.
Among individual movers, SpaceX rallied 19.6% in its second trading session following its blockbuster initial public offering, lifting its valuation above US$2 trillion. Meanwhile, Fox slumped 16.8% after announcing a US$22 billion acquisition of Roku, whose shares fell 1.9%.
Attention is now shifting to the US Federal Reserve’s policy meeting on Wednesday. Investors widely expect interest rates to remain unchanged, although markets continue to price in the possibility of another rate increase before the end of the year.
The CBOE Volatility Index, often regarded as Wall Street’s fear gauge, fell for a third consecutive session to its lowest level in more than a week.
Reuters
