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A cautious rebound in US markets on Monday followed reports of renewed diplomatic efforts to ease tensions in the Middle East. Stocks moved higher, oil prices slipped from recent highs, and investors turned their attention to upcoming inflation data and policy signals from the Federal Reserve.
The S&P 500 rose about 0.3% to 0.4% in morning trading in New York, while the Nasdaq 100 gained as much as 0.7% and the Dow Jones Industrial Average added about 0.2%. The move came as traders reacted to reports that regional mediators were working on a temporary ceasefire proposal involving Iran and the United States.
Equities posted a fourth straight day of gains as investor sentiment improved on signs of a possible diplomatic breakthrough. Reports said Pakistan, Egypt, and Turkey were pushing for a ceasefire that could last about 45 days. President Donald Trump also extended a deadline to Tuesday for Iran to reopen the Strait of Hormuz.
The Strait remains central to market concerns because it is one of the world’s most important energy shipping routes. Any disruption there can quickly affect oil prices, inflation expectations, and broader risk appetite across financial markets.
Ian Lyngen of BMO Capital Markets said, “Markets remain vulnerable to the shifting sentiment surrounding the Middle East.” He added, “The President’s comments will most likely have a clear impact on setting the sentiment in risk assets as Tuesday evening’s deadline looms.”
Chip stocks helped support the broader market. Micron Technology led gains in the sector, while investors also followed fresh signals of continued strength in artificial intelligence-related demand.
Oil prices retreated as markets assessed the prospects for a pause in hostilities. West Texas Intermediate crude fell 0.4% to about $111.04 a barrel, while Brent crude traded near $108 to $109 a barrel. The move lower came after prices had surged on fears that a prolonged conflict could disrupt supply from the Gulf region.
OPEC+ said damage to Middle East energy infrastructure could continue to affect supply even after the conflict ends. The group approved an increase in output quotas for next month, though the move was viewed as limited in immediate effect.
In currency markets, the Bloomberg Dollar Spot Index slipped 0.1%. The euro rose 0.2% to $1.1542, and the British pound added 0.3% to $1.3237. The Japanese yen was little changed at 159.72 per dollar. In bonds, the yield on the 10-year US Treasury eased one basis point to 4.33%, while German and British 10-year yields were little changed.
Also Read: US Stock Market Today: Wall Street Drops as Trump Speech Hits Iran Ceasefire Hopes, Oil Jumps
Investors also responded to softer US economic data. The ISM services index fell 2.1 points to 54 in March, showing that the sector continued to expand but at a slower pace. Employment in the services sector posted its largest decline since 2023, while input prices rose sharply.
Dave Mazza, chief executive officer of Roundhill Financial, said, “Economic data is signaling that inflationary pressures remain firm, leaving the Fed increasingly boxed in.” He added that markets were still focused on Iran and the possibility of a ceasefire.
Jeff Roach of LPL Financial said, “A prolonged struggle over the Strait of Hormuz into May and June would markedly darken the outlook for the US and the global economy.” He also said the latest labor market data gave Federal Reserve officials room to remain in “wait and see” mode.
Money markets reduced expectations for policy easing after the latest payroll figures came in stronger than expected. Attention now turns to the March consumer price index due on Friday. Economists expect a 1% monthly rise, which would be the largest increase since 2022.
Oracle named Hilary Maxson as chief financial officer.
OpenAI released new policy recommendations on AI and infrastructure.
Neurocrine Biosciences agreed to buy Soleno Therapeutics for $2.9 billion.
Madison Air Solutions is seeking up to $2.23 billion in an IPO.
Strategy disclosed a roughly $14.5 billion unrealized first-quarter loss.
Seagate shares rose after Morgan Stanley lifted its price target.
Netflix gained after Goldman Sachs upgraded the stock to buy.
Carvana fell after BofA Global Research downgraded the shares to neutral.
