US equities rebounded on Monday and closed near session highs as expectations for a US and Iran agreement grew. Despite President Trump threatening to destroy any ships obstructing the US blockade in the Strait of Hormuz, market sentiment turned optimistic.
The S&P 500 rose over 1 percent and erased all losses incurred since the onset of the Iran conflict, signaling a return of risk appetite. The Dow Jones Industrial Average gained over 300 points, while the Nasdaq Composite advanced 1.2 percent. Technology shares surged, with software stocks recording their largest single-day gain in nearly a year and acting as the primary catalyst for the broader market rally.
Trump stated during Monday trading that appropriate representatives from Iran had called that morning to express a desire for an agreement, which bolstered market confidence. Previously, the US announced a total blockade on all maritime traffic entering and exiting Iranian ports and warned of forceful action against Iranian vessels approaching the blockade zone. Iran retaliated by threatening to target all Persian Gulf ports if its energy facilities were attacked.
Oil prices retreated from the $100 per barrel level on Monday after Trump disclosed that 34 ships had navigated the Strait of Hormuz the previous day. Brent crude closed near $98 per barrel, and West Texas Intermediate crude futures rose 1.4 percent to $97.94 per barrel. The market interpreted the US blockade as a negotiating tactic, preventing a further spike in oil prices.
The earnings season officially kicked off with Goldman Sachs reporting better than expected profits, although its shares edged lower. Major financial institutions including Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, and Morgan Stanley are scheduled to release their results next. Markets broadly anticipate S&P 500 constituents to post a 12.6 percent year-over-year earnings growth, potentially marking the sixth consecutive quarter of double-digit expansion.
Looking at the major indices on Monday, the Dow Jones Industrial Average climbed 301.68 points or 0.63 percent to 48,218.25. The Nasdaq Composite added 280.84 points or 1.23 percent to 23,183.74. The S&P 500 rose 69.35 points or 1.02 percent to 6,886.24. The Philadelphia Semiconductor Index advanced 149.70 points or 1.68 percent to 9,039.52, and the NYSE FANG+ Index gained 189.95 points or 1.27 percent to 15,171.72. The majority of the 11 S&P 500 sectors advanced, led by financials and information technology, while utilities and consumer staples finished lower.
Among the mega-cap technology stocks in the NYSE FANG+ Index, Meta gained 0.74 percent, Alphabet rose 1.28 percent, Microsoft surged 3.64 percent, and Amazon added 0.63 percent, whereas Apple slipped 0.49 percent. The Philadelphia Semiconductor sector generally closed higher. Advanced Micro Devices rose 0.73 percent, Broadcom gained 2.21 percent, Nvidia added 0.36 percent, Qualcomm advanced 2.48 percent, and Micron Technology climbed 1.42 percent. Applied Materials was an exception, falling 0.94 percent. Taiwanese ADRs saw mixed results, with Advanced Semiconductor Engineering soaring 6.88 percent and Chunghwa Telecom edging up 0.07 percent, while Taiwan Semiconductor Manufacturing Company declined 0.28 percent and United Microelectronics Corporation fell 0.41 percent.
In corporate news, Goldman Sachs reported a 19 percent year-over-year increase in first-quarter profit. The bank achieved its second-best quarterly performance on record, driven by strong trading and investment banking operations amid market volatility. However, weaker than expected results in fixed income operations weighed on the stock, which fell 1.87 percent. Oracle shares jumped over 12 percent to $155.62, becoming one of the top percentage gainers in the S&P 500 following a demonstration of its artificial intelligence technologies for the utilities sector at its Customer Edge Summit. Intel shares rose 4.49 percent to $65.18, marking a ninth consecutive session of gains. SanDisk surged nearly 12 percent to $952.50 ahead of its inclusion in the Nasdaq 100 Index prior to the market open on April 20, replacing software firm Atlassian. CoreWeave climbed over 8 percent to $110.27, extending last week's strong momentum driven by artificial intelligence infrastructure orders and bringing its cumulative gain over the past week to 24 percent.
Wall Street analysts noted that while geopolitical risks remain elevated, investors broadly perceive room for negotiations, helping to stabilize market sentiment. Keith Lerner, co-chief investment officer at Truist, indicated that market focus is gradually shifting back to corporate fundamentals, with technology and artificial intelligence sectors remaining the primary drivers of the bull market. Fundstrat strategist Tom Lee suggested that a market bottom may have formed, predicting the S&P 500 could challenge new all-time highs within the next six months. Veteran strategist Ed Yardeni also observed that the market is adjusting to the uncertainties brought by the Middle East conflict, drawing parallels to the initial market reaction to the Russia-Ukraine war. Additionally, Goldman Sachs highlighted that energy stocks remain an attractive investment if oil prices stay relatively high, identifying several oil and energy service companies with further upside potential.