The stock market spent July panicking about oil prices, chip valuations, and AI spending. It showed up Monday morning in a completely different mood.
All three major indexes are up more than 1% as of 11:54 a.m. ET. The Nasdaq Composite (^IXIC +2.13%) leads with a 1.8% gain after opening nearly flat. The S&P 500 (^GSPC +1.48%) also started slow, rising to a 1.2% gain. The Dow Jones Industrial Average (^DJI +1.32%) is a different story, staying above the 1% mark through the morning. As of this writing, it’s up by 1.1% or roughly 560 points.
^IXIC data by YCharts
Cheaper oil and an AI relief trade
Energy is Monday’s most obvious catalyst.
President Trump reportedly scrapped planned strikes against Iran in favor of more diplomatic talks. The effect on oil prices and market moods was quick. The United States Oil Fund (USO -5.46%) fell 6%. Cheaper oil means less inflation pressure, and stocks like that math, from robust value plays to high-octane growth stocks.
The second driver is a continuation of last week’s AI earnings reports. Alphabet (GOOG +4.44%) (GOOGL +4.88%) rose 5.3%, making it the single largest contributor to both the S&P 500 and Nasdaq Composite indexes. The story that once read as “alarming capex” now focuses on “Google Cloud grew 82%.” Same company, same spending plan, completely different market reception.
Image source: Getty Images.
The rest of the Magnificent 7 came along for the ride, with gains of 4% or more across the software-oriented side of that elite club. Nvidia (NVDA +2.93%) rose 3.1% as its top customers looked good again. It doesn’t hurt that President Trump plans a sit-down meeting with leading AI service providers on Tuesday, hoping to set up security frameworks for advanced large language models (LLMs).
One Magnificent 7 member didn’t get the bullish memo, though. Apple (AAPL -1.78%) is down 1.9%, nursing a hangover from last week’s soft guidance. The iPhone maker’s gloom held back the cap-weighted indexes but didn’t really change the Dow’s exuberance.
Energy stocks are broadly down, as expected, alongside falling oil prices. But two-thirds of the 30 Dow stocks are up this morning. The Dow and S&P 500 are sniffing at all-time highs after a two-month downtrend. Times are pretty good on Wall Street.
Index
NASDAQ Composite Index
Today’s Change
(2.13%) +540.04
Index Level
25,913.90
Key Data Points
Day’s Range
25,420.35 – 25,967.44
52wk Range
20,794.64 – 27,093.90
Zooming out on a mood swing
Here’s what makes Monday interesting. Every ingredient in today’s rally was wrecking the market last month. Brent Crude oil above $100 fell to near $80 per barrel. Terrifying AI capex became validated cloud revenue.
Nothing fundamental about these businesses changed in seven trading days. The narrative did, and indexes moved by more than a percentage point in both directions as the drama played out.
The ISM Manufacturing PMI report is due later today, followed by several economic reports in early August. Dow heavyweight Caterpillar (CAT +1.87%) reports earnings tomorrow, and Space Exploration Technologies (SPCX +5.68%) is dropping its first report as a public company on Tuesday, as the third earnings season of 2026 marches along.
Long story short, there’s probably more volatility around the corner.
