The New York Stock Exchange closed higher despite a surge in global oil prices and heightened geopolitical tensions in the Middle East. The robust performance of AI-related semiconductor stocks propelled the market to fresh all-time highs.
On Monday, the S&P 500 index climbed 14.62 points (0.20%) to close at 7,413.55, marking its first-ever finish above the 7,400 threshold.
The Nasdaq Composite Index advanced 25.88 points (0.10%) to 26,272.96, while the Dow Jones Industrial Average gained 100.46 points (0.20%) to end at 49,709.62.
Both the S&P 500 and Nasdaq set new record highs.
Despite stalled U.S.-Iran ceasefire talks and soaring oil prices, investors remained fixated on the artificial intelligence (AI) investment boom.
Earlier, President Donald Trump lambasted Iran’s latest proposal as TOTALLY UNACCEPTABLE, describing the ceasefire as being on life support.
This rhetoric fueled a sharp uptick in global oil prices. West Texas Intermediate (WTI) crude surpassed 98 USD per barrel, with Brent crude exceeding 104 USD.
Consequently, some airline stocks weakened due to concerns over escalating fuel costs.
However, the broader market continued to rally, led by semiconductor stocks. The ongoing AI infrastructure investment frenzy channeled significant capital into related sectors.
The Philadelphia Semiconductor Index surged 2.6%. Micron Technology jumped 7% amid expectations of a sustained rally in memory semiconductors, while Nvidia climbed 2%.
Intel Corporation also saw further gains, building on last week’s 14% spike, as speculation about potential semiconductor production collaboration with Apple gained traction. Qualcomm Incorporated likewise reached new all-time highs.
Ross Mayfield, an investment strategist at Baird, told Reuters that the semiconductor and AI infrastructure trades now have a life of their own, adding that some stocks are moving almost independently of news flow.
The first-quarter earnings season is also bolstering market sentiment. To date, 440 of the S&P 500 companies have reported earnings, with 83% surpassing market expectations.
According to financial data provider LSEG IBES, the projected first-quarter net income growth for S&P 500 companies stands at 28.6%, nearly double the 14.4% estimate from early April.
Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, noted that the key driver of the current rally is overwhelming earnings growth.
However, market focus is gradually shifting from earnings to macroeconomic and geopolitical factors.
This week’s release of the Consumer Price Index (CPI), Producer Price Index (PPI), and retail sales figures will shed light on how surging oil prices are impacting inflation and consumer spending.
Notably, the sharp increase in gasoline prices is viewed as a critical factor that could potentially erode American consumers’ purchasing power.
This week, Cisco Systems and Apple are slated to report earnings, while Walmart Inc and Nvidia will disclose their results later this month.