Dow Jones and Nasdaq climb as oil eases on reports of Iran sanctions lift Proactive uses images sourced from Shutterstock
US stocks battled higher on Monday morning, reversing some of the declines from the end of last week, even though investors continued to worry about rising bond yields, stubborn inflation and the economic fallout from higher oil prices.
The Dow Jones opened 0.2% higher at 49,608, while the S&P 500 was up 0.15% and the Nasdaq was just above flat.
All three majors closed Friday more than 1% lower, with the Nasdaq leading the retreat by shedding 1.5% as traders cut exposure to technology and AI-linked shares ahead of Nvidia earnings this week.
Leading the early risers on the Dow were 3M, Salesforce and Travelers Companies, while fallers were led by Caterpillar, UnitedHealth and Chevron,
On the tech-heavy Nasdaq, the biggest fallers included Strategy (down 10%), Seagate Technology, Applied Materials and Western Digital, while among the Mag 7 giants, Nvidia, Microsoft, Apple, Broadcom, Tesla and Meta were in red in early trading.
Bond markets remained under pressure after stronger-than-expected US inflation data last week fuelled concerns that the Federal Reserve may need to keep interest rates higher for longer, or even consider further hikes.
The US 30-year Treasury yield climbed above 5.1%, its highest level since 2023, while oil prices remained elevated amid concerns over disruption in the Strait of Hormuz.
Overnight, WTI crude had risen to a two-week high above $108 a barrel, though dropped to below $105 before live trading opened, following reports from newswires in Iran that some progress had been made in negotiations with Washington, where Pakistan is acting as a go-between.
The US “has accepted the lifting of Iran’s oil sanctions in its new text,” the semi-official Tasnim agency reported, with Washington proposing a temporary waiver by the Office of Foreign Assets Control until a final agreement with Tehran is secured.
European markets were resilient at the start of the week, with Frankfurt’s DAX up 1% and London’s FTSE 100 gaining 0.5%, though France’s CAC 40 slipped into negative territory.
Macroeconomic data to watch during the week includes pending home sales on Tuesday, mortgage approvals and Fed minutes on Wednesday, then flash PMI data from the US, UK, Germany and the Eurozone on Thursday.
Global PMIs will be “a real-time pulse check on the global economy”, says market analyst Kenny Polcari at Slatestone.
“Is growth slowing? Or are we drifting toward that ugly stagflation setup where growth weakens while inflation stays sticky?”
