Wall Street opened sharply higher on Monday after Iran indicated it would halt its military strikes against Israel, easing geopolitical tensions and boosting investor sentiment.
The technology-heavy Nasdaq Composite surged 1.5% to 26,098.10, recovering part of the heavy losses suffered during Friday’s 4.2% decline as investors returned to growth and technology stocks.
The broader S&P 500 climbed 1.0% to 7,454.22, while the Dow Jones Industrial Average advanced 0.7% to 51,230.77.
Markets welcomed signs of de-escalation in the Middle East after weeks of uncertainty that had driven up oil prices and fuelled concerns about inflation, global growth and the potential for further military conflict.
Semiconductor stocks surged as investors returned to the sector following last week’s sharp sell-off, helping drive a broader recovery across US markets.
Intel led the gains among S&P 500 constituents, soaring 9.6%, while Micron Technology climbed 8.4% and Advanced Micro Devices (AMD) rose 4%
The recovery also reflected hopes that easing geopolitical tensions could reduce pressure on energy markets and lessen the risk of further inflation shocks, a key concern for central banks and investors alike.
Friday’s market weakness had been driven by stronger-than-expected US jobs data, which increased expectations that the Federal Reserve may keep interest rates higher for longer. However, the prospect of reduced geopolitical risk helped shift investor focus back towards corporate earnings and economic resilience.
While uncertainty remains over the long-term outlook for the region, markets reacted positively to the latest developments, with traders moving back into risk assets after several sessions dominated by concerns over conflict and energy supply disruptions.
Investors will continue to monitor both diplomatic developments in the Middle East and upcoming economic data for further direction as markets attempt to regain momentum following a volatile period.
