U.S. stocks rebounded on Monday as a steep drop in oil prices eased inflation worries and dip buyers returned to battered technology shares.
The Dow Jones Industrial Average rose 1,104.02 points, or 2.15 percent, to 52,389.75. The S and P 500 added 173.08 points, or 2.35 percent, to 7,549.94. The Nasdaq Composite Index rose 673.72 points, or 2.74 percent, to 25,253.14. The early gains faded somewhat into the close, leaving the major indexes below their session highs.
All 11 primary S and P 500 sectors ended higher, with industrials and consumer discretionary leading the gainers by rising more than three percent each. Energy lagged as crude prices slid.
Oil prices tumbled after U.S. President Donald Trump said Sunday that fresh U.S. strikes on Iran were highly unlikely as long as negotiations to end the conflict progressed. Brent crude settled down 5.85 percent at 92.57 U.S. dollars a barrel and continued falling after settlement to its lowest since late August, while West Texas Intermediate settled down 4.38 percent at 86.85 dollars a barrel. Brent had already plunged 16 percent last week, its steepest weekly drop since the start of the COVID-19 pandemic.
On the corporate front, chipmakers led the rebound. The Philadelphia Semiconductor Index rose more than six percent after plunging over 12 percent last week, its biggest weekly drop since the week ending April 4, 2025. Advanced Micro Devices surged 13.26 percent and Broadcom gained nearly nine percent.
"The AI story is not going away if people are worried about that, the Democrats are not going to destroy AI. They can't. It's got a life of its own. They can put regulation around it, but they're certainly not stopping it," said Ken Polcari, partner and chief market strategist at SlateStone Wealth.
Morgan Stanley and UBS also said last week's rout in AI stocks was overdone, while fears of a rate hike in December persisted after October's stronger-than-expected jobs report.
Nvidia was the sole decliner in the index in the Philadelphia Semiconductor Index, tumbling 4.27 percent to its lowest intraday level since March 31 after its board opened an independent investigation into CEO Jensen Huang.
On the earnings front, Constellation Energy shot up more than 10 percent after its adjusted third-quarter profit beat expectations and it raised its full-year guidance. Private equity company KKR advanced 1.67 percent after its quarterly profit hit a record high.
U.S. stocks had slumped last week after a sweeping Democratic victory in the midterm elections fed concerns that new regulations could slow AI data-center construction, with the S and P 500 posting its biggest weekly drop since April 2025. Investors also weighed strong earnings and the outlook for Federal Reserve policy.
Meanwhile, September wholesale trade sales in the United States rose 2.8 percent from a month earlier, the U.S. Commerce Department's Census Bureau said Monday. Traders now see about an 84-percent chance of a quarter-point rate hike at the Fed's December meeting, according to CME FedWatch.
U.S. stocks rebound as oil prices plunge
