Wall Street's main indexes rose on Monday as investors appeared hopeful that a resolution to the Middle East war could be found while they looked past the failed weekend talks between the U.S. and Iran and monitored the start of the earnings reporting season.
After a muted start to the day the Nasdaq and the S&P 500 picked up some steam on Monday afternoon after U.S. President Donald Trump said that Iran wants to make a deal but that he will not come to any agreement that allows Tehran to have a nuclear weapon.
This was after Trump announced that the U.S. military began a blockade of ships leaving Iran's ports, while Tehran threatened to retaliate against ports of its Gulf neighbours after weekend talks on ending the war broke down.
"And so there seems to be some desensitization around these back and forth talks with negotiations on, negotiations off, especially in the midst of this ceasefire, which seems to be holding for the moment," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
"Investors are fearful to be caught off sides, that if we have a resolution come together quickly, that the market could rally significantly and they'd be left on the sidelines."
It also helped that crude oil futures pared earlier gains to settle below the US$100 level. Chicago Federal Reserve President Austan Goolsbee said oil futures markets are pricing an expectation the surge in oil prices will be short-lived, and that as long as this is the case the impact on the U.S. economy may be limited.
According to preliminary data, the S&P 500 .SPX gained 69.34 points, or 1.02%, to end at 6,886.23 points, while the Nasdaq Composite .IXIC gained 280.51 points, or 1.23%, to 23,183.40. The Dow Jones Industrial Average .DJI rose 291.09 points, or 0.61%, to 48,207.66.
Among the S&P 500's 11 major industry sectors, technology .SPLRCT was the biggest gainer during the session with boosts from software companies, including Microsoft MSFT.O and Oracle ORCL.N. The iShares expanded Tech-software index ETF IGV.N, which has underperformed sharply this year on concerns about AI disruption, rallied sharply on Monday.
Defensive utilities .SPLRCU and consumer staples .SPLRCU sectors lagged.
GOLDMAN RESULTS UNDERWHELM
Investors appeared less than impressed by Goldman Sachs' GS.N kick-off of the first quarter earnings season. Its shares fell with concerns over weakness in fixed income, currencies and commodities trading revenue outweighing its profit beat.
"We don't see the market really paying too much attention to the earnings beat. And it's all because of prospects of higher inflation, weaker economic activity and a Fed that may be forced to stay on hold for a long, long time," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Goldman CEO David Solomon said market volatility stemming from the conflict had tempered IPO execution, but the environment remains robust and activity will rebound once conditions stabilize.
In other individual stocks, shares of Allogene Therapeutics ALLO.O rallied, hitting their highest levels in over two years after interim data from a mid-stage study showed that its blood cancer therapy reduced the risk of relapse in patients.
Shares in Albemarle ALB.N, the world's largest lithium producer, rallied after Oppenheimer raised its price target on the company to US$222 from US$216.
TRAVEL STOCKS FALL
Airline stocks including United Airlines UAL.N Delta Air Lines DAL.N and American Airlines AAL.O fell on concerns about higher oil prices swelling fuel costs.
Shares in industrial supplies distributor Fastenal's FAST.O sold off after earnings. Sandisk SNDK.O rose sharply as the memory chipmaker was on track to join the Nasdaq-100 index .NDX on April 20.
Separately, data showed that U.S. existing home sales fell to a nine-month low in March amid tight inventory and growing concerns over the labor market.
Reuters
