Oil prices rise, but not by enough to drag Wall Street far off its records – AOL
Oil prices climbed Monday after renewed fighting threatened a fragile U.S.-Iran ceasefire, but U.S. stocks largely held near record highs as investors looked past energy market jitters.
The S&P 500 hovered around the all-time high it set Friday. By 9:35 a.m. Eastern, the Dow Jones Industrial Average slipped about 130 points, or 0.3%, while the Nasdaq composite was flat, both still near recent records.
Science Applications International Corp. surged 12.3% after posting stronger-than-expected quarterly profit and raising its outlook, supported by new federal contracts across the Department of Homeland Security, the Army, and other agencies.
Robust earnings have helped keep stocks elevated even as the conflict with Iran has lifted oil prices and complicated crude shipments from the Persian Gulf. Brent crude, the global benchmark, rose 5% to $95.69 a barrel, up sharply from roughly $70 before the war.
Higher fuel costs pressured travel and leisure shares. United Airlines fell 2.7%, and Royal Caribbean Group declined 1.6%.
Still, many investors are betting that U.S. and Iranian officials will ultimately reach an agreement to reopen the Strait of Hormuz, easing tanker traffic and stabilizing energy flows.
Big-name tech helped counterbalance energy worries. Nvidia climbed 3.8% after CEO Jensen Huang unveiled product updates at a conference, including news that the company’s next-generation AI platform, Vera Rubin, is moving into full production. The updates eased concerns about potential development delays, according to analysts.
Nvidia’s outsized influence on the broader market remains pivotal given its massive valuation. With the largest companies growing rapidly, market leadership has become highly concentrated. The top 10 constituents now account for nearly half of the S&P 500’s total value, by some estimates—a roughly four-decade high. While that concentration has boosted the index during the AI-driven tech rally, a broadening of market leadership could mean any pullbacks in mega-cap tech weigh more heavily on index funds even if most stocks advance.
In deal news, Berkshire Hathaway dipped 0.5% after agreeing to acquire Taylor Morrison Home for $6.8 billion, among the first major transactions under Greg Abel’s leadership following Warren Buffett’s tenure. Taylor Morrison Home jumped 22.4% on the announcement.
IBM rallied 5.9% after analysts lifted price targets. The stock also closed up 12% on Friday, capping a nearly 30% gain in May. The company recently highlighted a $1 billion government grant aimed at supporting the buildout of a quantum chip foundry.
Bond yields rose alongside oil. The 10-year U.S. Treasury yield climbed to 4.50% from 4.45% late Friday. Elevated yields have threatened to cool global growth and pressure asset prices, pushing the average long-term U.S. mortgage rate to its highest level in months. Higher borrowing costs could also restrain corporate financing for AI data centers, a recent pillar of U.S. economic strength.
Overseas, European stocks slipped after a firmer finish across much of Asia. Japan’s Nikkei 225 added 0.9%, while South Korea’s Kospi jumped 3.7% to a record, led by technology shares as investors continued to price in momentum for AI and other advanced technologies.
