The Dow Jones Industrial Average closed modestly higher on Monday, gaining 100.46 points, or 0.20%, to settle at 49,709.62. The broader S&P 500 rose 0.20% to 7,413.55, while the Nasdaq Composite added 0.10% to finish at 26,272.96. The gains came despite headwinds from rising crude oil prices and a lack of progress in U.S.-Iran nuclear negotiations.
Semiconductor and AI-related chip stocks led the advance, providing a counterbalance to energy-driven market jitters. According to Reuters, chip stocks outperformed the broader market, with the Philadelphia SE Semiconductor Index rising 1.2%. Ross Mayfield, investment strategy analyst at Baird, noted that the "semis and AI infrastructure trade" has developed a strong momentum of its own, independent of broader economic concerns.
Intel shares climbed, extending a 14% surge from Friday following reports of a provisional chip-manufacturing agreement with Apple. Qualcomm touched an all-time high during the session. The AI narrative remains firmly in focus as Nvidia and Applied Materials prepare to report earnings in the coming weeks.
Oil prices edged higher after President Donald Trump dismissed Iran's response to a U.S. peace proposal, reigniting fears of prolonged conflict in the region. West Texas Intermediate crude rose approximately 1.5% to $78.50 per barrel. The move fueled concerns that higher energy costs could stoke inflation, particularly at the pump, and complicate the Federal Reserve's monetary policy stance.
Airlines were among the notable laggards, with several carriers declining as higher crude prices threatened to squeeze margins. The selloff in transport stocks underscored the dual impact of rising oil: while energy producers benefit, companies with high fuel costs face headwinds.
Earnings season continues to provide a supportive backdrop. Of the 440 S&P 500 companies that have reported first-quarter results, 83% have exceeded analyst expectations, according to LSEG IBES data. Analysts now project aggregate first-quarter earnings growth of 28.6% year-over-year, nearly double the 14.4% forecast at the start of April. Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, remarked to Reuters that "the strength of the rally largely is a function of earnings growth, which is superb."
Investors are now turning their attention to the upcoming consumer price index (CPI) and retail sales data, due later this week. The CPI report will be scrutinized for any signs that rising energy costs are spilling over into broader consumer prices. Retail sales figures will offer clues on whether higher gasoline prices are beginning to dent consumer spending. Big-box retailers are also on the radar, as their earnings reports could provide further insight into consumer health.
The session's gains, while positive, lacked conviction. Trading volumes were modest, and the advance felt more like a cautious grind higher than a decisive breakout. With inflation data on the horizon, the sustainability of this uptick remains uncertain.
