US markets posted modest gains on Monday, with the S&P 500 closing at 7,174.01 points, up 0.12% and the Nasdaq Composite gaining 0.20% to 24,886.38, according to The Economic Times. The rally was driven by renewed hopes of negotiations between the United States and Iran, as Iran's foreign minister Abbas Araqchi was expected in Islamabad to discuss proposals for restarting peace talks, according to Pakistani government sources. The gains came at the end of a week marked by continued tensions, with the US maintaining a naval blockade of Iranian ports and Iran seizing ships attempting to pass through the Strait of Hormuz. As per CNBCTV18.COM, the optimism also comes a day after US President Donald Trump announced that Israel and Lebanon have agreed to extend their ceasefire by three weeks following talks at the White House. Ryan Detrick, chief market strategist at Carson Group, noted that there's optimism that talks are going to restart soon, with the market potentially signaling there could be some type of major peace deal on the horizon.
Technology stocks, particularly semiconductors, remained a key source of market strength, with the Philadelphia SE Semiconductor Index rising 4.3%, extending its winning streak to 18 sessions, as reported by ABP Live. Intel surged 23.4% to a record high after issuing a stronger-than-expected second-quarter revenue forecast. Rivals Advanced Micro Devices and Arm Holdings climbed over 15% each, while Nvidia gained 5% and was on track for a record close. The information technology index rose 2.3%, providing the largest boost to the broader market. According to CNBCTV18.COM, Intel is having its biggest single-day gain since 1987 after surging past its dot-com-era highs in a powerful post-earnings rally, with the stock holding firmly above previous record levels. The breakout also carries technical significance, with the prior resistance zone around $75–$76 now acting as a key support level for Intel. Ryan Detrick from Carson Group emphasized that Intel just confirms the AI boom is alive and well, and this earnings season is off to a tremendous start.
First-quarter reporting season has hit full stride, with 139 of the companies in the S&P 500 having reported, of which 81% have beaten earnings estimates, according to Reuters reports. Analysts now see aggregate year-on-year S&P 500 earnings growth of 16.1%, up from the 14.4% growth projected at the beginning of the quarter, according to LSEG I/B/E/S. However, CEOs are increasingly providing downbeat guidance due to spiking fuel costs resulting from the war on Iran. Consumer products company Procter & Gamble warned on its Friday earnings call that it expects a roughly $1 billion hit to its fiscal 2027 profit because of the war-related energy price shock. Next week, a spate of high-profile earnings is on the docket, including tech and tech-adjacent megacaps Amazon, Alphabet, Meta Platforms, Apple and Microsoft, as well as oil supermajors Exxon Mobil and Chevron. As per The Economic Times, the companies due to report this week account for roughly 44% of the S&P 500's market capitalization, according to Raymond James.
Oil prices dipped as optimism over potential U&Iran peace talks offset supply concerns, with US crude falling 1.51% to settle at $94.40 per barrel and Brent settling at $105.33 per barrel, down 0.25%, according to Reuters reports. Despite the rally, oil prices continue to weigh on sentiment, with Brent crude futures remaining around 44% above pre-war levels due to disruptions in the Strait of Hormuz. However, oil prices moved lower on signs of potential diplomatic progress, easing geopolitical risk premium. As per CNBCTV18.COM, US West Texas Intermediate crude fell 1% to trade above $94 per barrel, while Brent crude slipped 0.7% to hover above $104. However, some strategists see the recent pullback as an opportunity, with Manish Kabra from Societe Generale noting that U.S. equities are seen as more immune to the oil shock than other countries. U.S. benchmark Treasury yields dipped on hopes that U&Iran peace talks could take place over the weekend, with the yield on U.S. 10-year notes falling 0.9 basis points to 4.314%.
Market breadth remained positive with advancing stocks outpacing decliners by a 1.42-to-1 ratio on the NYSE and 1.37-to-1 on the Nasdaq, according to ABP Live reports. The S&P 500 recorded 32 new 52-week highs and four new lows, while the Nasdaq Composite posted 96 new highs and 65 new lows. As many as 25 stocks in the S&P 500 hit new 52-week highs on Friday, reflecting broad market strength led by technology and semiconductor names, with standout names reaching all-time highs including Amazon, Applied Materials, AMD, Intel, KLA Corporation, Lam Research, Monolithic Power Systems, and Micron Technology. Despite the strong performance, the Dow was set to snap a three-week winning run, though both major indices maintained their positive momentum driven by geopolitical developments and technology sector strength. According to The Economic Times, the session began with the S&P 500 up over 100% since the bull market began in October 2022.
