U.S. stocks ended sharply higher on Monday, with the Dow hitting a record closing high, as weekend hostilities between the United States and Iran eased and as major technology-related shares rose following recent selling.
A source told Reuters that Iranian and U.S. technical teams working on the implementation of an interim peace deal are expected to meet in Doha in the coming days, after the weekend strikes threatened to derail the fragile agreement.
The U.S. and Iran on June 17 signed a memorandum of understanding aimed at ending four months of conflict. Under the document, both sides agreed to cease hostilities and reopen the Strait of Hormuz.
"The fact that we had hostilities between the U.S. and Iran over the weekend really didn't have a negative effect on the market," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"The market is looking forward and preparing for earnings season, which is not that far away," he said.
Most S&P 500 companies are set to begin reporting second-quarter results after mid-July.
Communications services .SPLRCL led gains among S&P 500 sectors. Shares of Comcast CMCSA.O jumped after the media and cable provider said it plans to separate into two independent, publicly traded companies through a tax-free spinoff of NBCUniversal and Sky.
SpaceX SPCX.O ended higher after Nasdaq said the newly listed company will be added to the Nasdaq 100 index on July 7. Google parent Alphabet GOOGL.O closed higher as it kicked off its first day as a Dow component.
According to preliminary data, the S&P 500 .SPX gained 85.24 points, or 1.16%, to end at 7,439.26 points, while the Nasdaq Composite .IXIC gained 514.90 points, or 2.04%, to 25,812.52. The Dow Jones Industrial Average .DJI rose 296.58 points, or 0.57%, to 52,172.69.
Quarter-end "window dressing," where investors buy certain stocks to make their portfolios look better, may also have helped the market, Cardillo said.
Concerns about AI spending had hit shares of artificial intelligence-related companies recently, including semiconductors and many of the Magnificent Seven group of megacap stocks. On Monday, the information technology index .SPLRCT gained.
RBC Capital Markets cited earnings strength and a supportive macro backdrop as it raised its 12-month target for the S&P 500 index to 8,150 from 7,900.
Reuters
