US stocks rallied sharply on Monday as falling oil prices and renewed buying in technology shares helped markets recover from last week’s heavy sell-off.
The Dow Jones Industrial Average surged 1,104.02 points, or 2.15%, to close at 52,389.75. The S&P 500 jumped 2.35% to 7,549.94, recording its strongest session since April 8, while the Nasdaq Composite gained 2.74% to 25,253.14.
The rebound followed last week’s sharp declines in artificial intelligence-related stocks, driven by concerns that tighter US regulations on data centre construction, energy consumption and development costs could slow investment in AI infrastructure.
Semiconductor stocks led Monday’s recovery, with AMD surging 13% and Broadcom climbing nearly 9%. The iShares Semiconductor ETF gained more than 7% after losing approximately 13% the previous week.
Other major technology companies also advanced. Tesla rose 5.5%, Amazon gained around 3%, Microsoft added nearly 3% and Alphabet climbed 1%.
Nvidia was a notable exception, falling 4% after its board announced an investigation into chief executive Jensen Huang’s relationship with a businesswoman identified by US intelligence agencies as an alleged Chinese spy.
Financial and industrial stocks also contributed to the rally, with Goldman Sachs and Caterpillar supporting gains in the Dow.
Oil prices declined sharply after US President Donald Trump indicated that further attacks on Iran were highly unlikely, easing concerns about an escalation in the Iran war. Brent crude fell 5.85% to US$92.57 a barrel, while West Texas Intermediate dropped 4.38% to US$86.85.
Investors are now looking ahead to US consumer inflation data on Tuesday and producer prices on Friday for further guidance on the Federal Reserve’s interest rate outlook.
Corporate earnings from CoreWeave, Cisco and Applied Materials will also be closely watched for indications of demand across the artificial intelligence sector.
Australian Market Outlook
Australian shares are set to open strongly on Tuesday, with S&P/ASX 200 futures up 96 points, or 1.06%, to 9,130.
The positive lead follows a broad rally on Wall Street, supported by a sharp decline in oil prices and renewed investor interest in technology stocks following last week’s post-election sell-off.
Lower energy prices could help ease inflation concerns, although uncertainty surrounding US technology regulation and the outlook for global interest rates remains a key consideration for investors.
Locally, attention will turn to two important economic releases providing insight into household and business conditions.
The Westpac-Melbourne Institute Consumer Sentiment Index is due at 10.30am AEDT, followed by the NAB Business Confidence Survey at 11.30am AEDT.
Investors will assess both reports for signs of how Australian households and businesses are responding to higher borrowing costs following the Reserve Bank’s latest interest rate increase.
