US stocks made a notable recovery from a significant sell-off by late Monday morning as Wall Street evaluated the repercussions of US and Israeli strikes on Iran and the ensuing counterattacks.
The S&P 500 ^GSPC and the tech-dominated Nasdaq Composite ^IXIC bounced back from an early dip, recovering by 0.1% and 0.5%, respectively. The Dow Jones Industrial Average ^DJI remained close to unchanged after regaining substantial losses.
Investors continued to focus on the impact of oil prices and inflation concerns, already anxious about the economic climate for stocks. The S&P 500 closed February in the negative following a resurgence of volatility in AI and software sectors that unsettled markets.
Oil prices surged on Monday, with Brent crude futures BZ=F climbing 6% to approach $78. Meanwhile, West Texas Intermediate futures CL=F traded just below $71. While Iran ranks as OPEC’s fourth-largest producer, fears of a sustained disruption in the essential Strait of Hormuz also loomed, as tanker traffic faced significant interruption.
Energy giant Exxon XOM saw a significant uptick, while defense stocks, including Lockheed Martin LMT, also garnered interest. Conversely, travel-related stocks experienced declines, with Delta Air Lines DAL dropping as a result.
In other market sectors, gold GC=F reached $5,400 an ounce before repositioning its gains. Simultaneously, Treasury yields ^TNX moved higher as markets tempered expectations regarding interest rate cuts amidst rising inflation.
