Wall Street’s main indexes ended higher on Monday, with the Dow Jones Industrial Average rebounding from earlier losses as investors balanced escalating geopolitical tensions with cautious optimism that a diplomatic resolution between the US and Iran could still emerge.
The S&P 500 rose about 1%, while the Nasdaq Composite gained roughly 1.2%. The Dow added more than 300 points, recovering from a decline of over 400 points earlier in the session as sentiment improved into the afternoon.
Markets rebound on cautious optimism
Stocks initially struggled after weekend peace talks between the US and Iran failed to produce a breakthrough and Washington announced a blockade of ships linked to Iranian ports.
However, markets found support later in the day after President Donald Trump signaled that Tehran may still be open to negotiations.
“We’ve been called by the other side,” Trump said. “They’d like to make a deal very badly.”
The comments helped lift equities, with investors increasingly focused on the possibility of a near-term diplomatic resolution despite heightened tensions in the Middle East.
Oil prices, which had surged earlier in the session, also eased below the $100 mark, helping to stabilize sentiment.
Chicago Federal Reserve President Austan Goolsbee said futures markets suggest the spike in oil prices may be short-lived, limiting the broader economic impact.
Tech stocks lead gains as sectors diverge
Technology stocks were the biggest contributors to the market’s advance, with software companies including Microsoft and Oracle providing strong support.
The iShares Expanded Tech-Software ETF, which has lagged this year amid concerns over artificial intelligence disruption, rallied sharply on Monday, reflecting renewed investor interest in the sector.
In contrast, defensive sectors such as utilities and consumer staples underperformed, signaling a shift toward risk-on positioning as investors sought exposure to growth-oriented stocks.
Individual movers also highlighted broader market themes.
Shares of Allogene Therapeutics surged to their highest levels in more than two years after positive mid-stage trial data for its blood cancer therapy. Albemarle also gained after a price target upgrade from Oppenheimer.
However, airline stocks including Delta Air Lines and American Airlines declined as rising oil prices raised concerns about higher fuel costs.
Earnings concerns and macro risks linger
Despite the broader market gains, the start of earnings season drew a muted response. Shares of Goldman Sachs fell after the bank reported a profit increase, as investors focused on weakness in its fixed income, currencies, and commodities (FICC) segment.
Goldman Sachs CEO David Solomon noted that volatility tied to the Iran conflict had tempered IPO activity, though he added that conditions remain supportive for a rebound once stability returns.
Elsewhere, economic data showed US existing home sales fell to a nine-month low in March, reflecting ongoing pressures from tight inventory and labor market concerns.
Looking ahead, investors remain focused on geopolitical developments and upcoming economic data, with uncertainty around oil prices, inflation, and central bank policy likely to continue shaping market direction in the near term.
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