NEW YORK / RankWire.AI / – U.S. equities experienced a rally on Monday, driven by gains in Big Tech stocks and a sharp drop in oil prices. The Dow Jones Industrial Average surged by 693.38 points, or 1.32%, closing at a record 53,178.41. The S&P 500 increased 1.48% to 7,600.50, nearly hitting its all-time high. Meanwhile, the Nasdaq Composite advanced 2.13% to 25,913.90, leading the major indices. The market momentum carried into August, with widespread gains across large and small-cap stocks.
Technology and communication services sectors were primary drivers of the upward move. Meta Platforms and Alphabet contributed to a 4.3% rise in the S&P 500 communication services segment, the sector’s strongest performance among 11. Amazon climbed 4.6% after surpassing a $3 trillion market valuation following quarterly results. An ETF tracking leading tech giants rose nearly 4%, indicating strong investor demand for top growth stocks.
Oil prices also played a role in supporting the market. Brent crude fell 4.7% to settle at $83.77 per barrel after President Donald Trump announced the U.S. would delay new strikes against Iran. Trump indicated discussions might focus on reopening the Strait of Hormuz, though Iran disputed the scheduling of such negotiations. This decline in oil prices alleviated inflation concerns and contributed to lower Treasury yields during trading. Energy shares dropped 1.2%, making them the weakest sector of the day.
Oil’s decline alleviates market stress
The 10-year Treasury yield eased to around 4.68%, down from late Friday levels. This decrease lessened borrowing costs for growth-oriented companies, which are sensitive to interest rate fluctuations. The Federal Reserve’s stance remained a key focus amid ongoing inflation worries and rising energy prices. New York Federal Reserve President John Williams commented that inflation pressures should gradually subside. Bond prices increased as yields declined, with traders awaiting further labor market data.
The rally went beyond just major tech stocks. The Russell 2000 index of smaller firms rose 1.7% to 2,981.91. Advancing stocks outnumbered decliners by 2.62 to 1 on the New York Stock Exchange and 3.01 to 1 on the Nasdaq. Trading volume reached 19.36 billion shares, above the 20-day average of 17.66 billion. The S&P 500 posted 15 new 52-week highs and one new low.
Corporate earnings bolster the upward trend
Earnings reports added further support. Of the 304 S&P 500 companies that had announced results through Friday, quarterly earnings grew by 29.3%. About 85.2% of these firms beat analyst estimates, according to market data provider LSEG. SpaceX gained 5.6% ahead of its first quarterly report since becoming a public entity. Conversely, Marriott International declined 7% after providing a Q3 profit forecast below expectations.
The Dow’s record close marked a strong start to August following a challenging July for some market sectors. Tech stocks had come under pressure from concerns related to AI investments, interest rate hikes, and the U.S.-Iran situation. Gains Monday propelled the S&P 500 to within 0.1% of its all-time high, with the Nasdaq also extending its rally. Year-to-date, the Dow has increased by 10.6%, the S&P 500 by 11%, and the Nasdaq by 11.5%.