Wall Street's Recovery: Oil Prices Slide, Conflict Ease on Middle East Tensions
Diminishing worries on Wall Street over Middle East escalation soften
With a breath of relief, Wall Street is recovering from last week's turmoil, as oil prices are decreasing, and US investors are now hopeful that the conflict between Israel and Iran won't escalate into a severe, wider conflict. Tech stocks, in particular, are seeing a surge in popularity among individual stocks.
Oil prices have driven the US stock market at the start of the week. The Dow Jones Index, the standard values index, closed with a gain of 0.8 percent, reaching 42,515 points. The broader S&P 500 rose by 0.9 percent to 6,033 points, and the Nasdaq technology exchange climbed by 1.5 percent, reaching 19,701 points. Relief came because oil prices eased, despite continuous attacks between Israel and Iran.
David Miller, chief investment officer at Catalyst Funds, commented, "The attacks continued, but it doesn't seem like oil markets and shipping routes have been disrupted." This led to oil prices falling by more than two percent on Monday. The attack by Israel on Iran and Iran's retaliatory attack on Israel had caused oil prices to rise by around seven percent on Friday, pushing the three major US indices each down by more than one percent. According to a report by the "Wall Street Journal," Iran is aiming for an end to hostilities with Israel, which has led market participants to hope for a ceasefire and weakened fears of a disruption in oil supplies from the region.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, said, "The market has already priced in some of the worst fears that there could be disruptions in energy markets or that a larger conflict could develop."
The upcoming meeting of the US Federal Reserve (Fed) is increasingly in focus. Investors still expect two rate cuts by December, with the first step in September seen as the most likely. "The key is how much flexibility the Fed believes it has," said Ben Laidler, strategist at Bradesco BBI. "We were pleasantly surprised that tariffs haven't yet fed through to inflation."
Investors are eagerly awaiting the Fed's statements on interest rates. Speculation about an imminent end to hostilities caused yields on US Treasury bonds to fall as fears of rising oil prices due to a prolonged conflict eased.
Among individual stocks, technology companies are in high demand. The Philadelphia Semiconductor Index jumped by around three percent. AMD gained 8.8 percent, Super Micro Computer by 5.1 percent, and Palantir by 2.9 percent. Nvidia, the AI chipmaker, rose by 1.9 percent.
Meta shares increased by 2.9 percent. Investors bought in after the company announced it would introduce ads on WhatsApp in the coming months, along with other features.
One of the companies linked to US President Donald Trump's plans is putting pressure on the US telecommunications sector. The stocks of AT&T and Verizon each fell by around one percent. The conglomerate Trump Organization, led by Trump's sons during his term, unveiled its own mobile network. The offering is primarily targeted at conservative Americans and aims to stand out with features like roadside assistance and telemedicine. Meanwhile, the stocks of UPS and FedEx each increased by over one percent after the Trump Organization declared them as shipping partners of Trump Mobile.
Sources:1. Wall Street Journal2. Bloomberg
- The ongoing conflict between Israel and Iran appears to have minimal impact on the community policy and general-news of Wall Street's recovery, as the Dow Jones Index, S&P 500, and Nasdaq experienced gains despite the escalating tension in the Middle East.
- Tech stocks, particularly those in the semiconductor industry, have seen an increase in popularity among individual investors, with companies like AMD, Super Micro Computer, Palantir, Nvidia, and Meta experiencing growth.
- Personal-finance considerations are playing a significant role in the current market, with investors closely monitoring the upcoming meeting of the US Federal Reserve and anticipating two rate cuts by December, possibly in September.
- In the realm of business and investing, US President Donald Trump's plans for a telecommunications network have sparked interest, causing stocks of AT&T and Verizon to dip, while UPS and FedEx stocks rose after being announced as shipping partners of Trump Mobile.
- The dynamics of technology, social-media, politics, and entertainment continue to shape the financial landscape, as the introduction of ads on WhatsApp by Meta and the launch of a conservative-targeted mobile network by the Trump Organization demonstrate.
