Oil prices rise, but not by enough to drag Wall Street far off its records

U.S. oil prices climbed 4.2% on Monday, with Brent crude settling at $94.98 per barrel after escalating tensions threatened the U.S.-Iran ceasefire. The rise reversed some of last week’s losses but kept prices well above pre-war levels of around $70, pressuring airlines like United and Alaska Air, which fell 2.6% and 3.3% respectively. Wall Street stocks largely ignored the oil spike, reaching new records as the S&P 500 added 0.3%, the Dow rose 0.1%, and the Nasdaq climbed 0.4%. Nvidia led gains with a 6.2% jump after CEO Jensen Huang announced product updates, reinforcing its dominance as the largest company by market value. Higher oil prices have stoked inflation fears, pushing global bond yields up and increasing borrowing costs for small businesses. The Russell 2000 index of small-cap stocks briefly dipped 1.3% before closing down 0.5%, reflecting sensitivity to rising interest rates. Analysts like Thomas Carroll of Stifel note that the top 10 stocks now account for nearly half the S&P 500’s market value, a 40-year high, signaling potential risks if market leadership shifts. Profit reports from companies like Science Applications International Corp. (SAIC), which surged 10.4% after beating earnings estimates, helped sustain market optimism. Meanwhile, Berkshire Hathaway dropped 0.9% following a homebuilder investment announcement, though broader gains from AI-driven tech stocks offset broader market concerns. Investors remain hopeful that a U.S.-Iran agreement could reopen the Strait of Hormuz, easing oil supply disruptions and inflation pressures. However, Carroll warns that a market rotation away from Big Tech could weigh on the S&P 500, even if individual stocks rise in the process.