Oil prices rise, but not by enough to keep Wall Street from more records

U.S. stock markets set fresh records on Monday, with the S&P 500 gaining 0.3% to 7,599.96, the Dow Jones Industrial Average rising 0.1% to 51,078.88, and the Nasdaq composite climbing 0.4% to 27,086.81. The gains followed a mixed day for individual stocks, where a slight majority declined, including airlines like United Airlines (-2.6%) and Alaska Air Group (-3.3%) amid a 4.2% jump in Brent crude oil prices to $94.98. Oil prices increased following escalating tensions that threatened the U.S.-Iran ceasefire, though Wall Street remained focused on broader economic signals. Rising oil costs had previously pushed inflation higher and increased Treasury yields, which had weighed on stock valuations. However, yields later eased, reducing pressure on smaller stocks like those in the Russell 2000 index, which finished down just 0.5% after earlier losses. Nvidia led market gains with a 6.2% surge after CEO Jensen Huang announced product updates, reinforcing its dominance as the largest company by market value in the S&P 500. The top 10 stocks now account for nearly half of the index’s total value, a 40-year high, according to Stifel’s equity strategist, Thomas Carroll. While artificial intelligence-driven growth in Big Tech stocks continues to drive performance, Carroll warned that a potential rotation away from these leaders could drag on overall market returns. Corporate earnings also supported the rally, with Science Applications International Corp. (SAIC) jumping 10.4% after reporting stronger-than-expected quarterly profits and raising its forecast. Meanwhile, Berkshire Hathaway fell 0.9% following its $6.8 billion acquisition of homebuilder Taylor Morrison Home, which saw its stock rise 22.3%. MGM Resorts International soared 16.1% after People Inc., led by Barry Diller, offered to acquire the remaining shares for $48.30 per share in cash. Despite geopolitical uncertainties, including the risk of further oil price increases, Wall Street’s optimism remained tied to AI-driven growth and strong earnings reports. Investors appear hopeful that a U.S.-Iran agreement to reopen the Strait of Hormuz could ease inflationary pressures, though volatility in oil prices and bond yields continues to influence market sentiment.