The New York Stock Exchange closed higher on Monday, as investors hoped for a potential agreement between Washington and Tehran despite the American blockade of Iran’s ports.
After opening lower, the key indices of the American market ultimately turned around: the Dow Jones gained 0.63%, the Nasdaq index rose by 1.23%, and the broader S&P 500 index by 1.02%.
“The market is betting that Donald Trump will manage to reach an agreement,” said Peter Cardillo of Spartan Capital Securities to AFP.
The U.S. president stated on Monday that the Iranians “would want to make a deal, at any cost,” following the failure of discussions in Pakistan to end the war in the Middle East.
He also mentioned on his Truth Social platform that 34 ships passed through the Strait of Hormuz on Sunday, “by far the highest number since the start of this unprecedented closure” by Iran.
A fifth of the world’s oil normally passes through this strategic chokepoint, where Tehran has imposed tolls that have significantly restricted maritime traffic in recent weeks, in response to Israeli-American attacks.
After rising in session to $103.87, the price of a barrel of Brent crude oil, the international benchmark, eventually fell below $100 at closing following these statements.
The American market had started the day in the red, as Donald Trump threatened on Monday to “destroy” any “fast attack vessel” from Iran breaking the blockade of Iran’s ports.
Denouncing an “illegal” act of “piracy,” Iran warned that it would target the ports of its Gulf neighbors if “the security of the ports of the Islamic Republic (…) was threatened.”
“The market’s reaction ultimately remains relatively moderate,” noted analysts at Briefing.com.
On the bond market, the 10-year yield on U.S. Treasury bonds was edging lower around 4.30% by 8:15 pm GMT, down from 4.32% at Friday’s close.
In addition to geopolitical developments, investors will also keep an eye this week on American indicators, including the Producer Price Index (PPI) for March set to be released on Tuesday.
In terms of companies, the earnings season has kicked off, with major banks leading the way.
American investment bank Goldman Sachs closed down (-1.89% at $890.63) despite announcing results that exceeded expectations.
The banking group reported a net profit of $5.4 billion (up 18% year-on-year), while analysts’ consensus was $5.08 billion.
The financial performance of JP Morgan (+1.14%), Wells Fargo (+1.41%), and Citigroup (+1.48%) is expected on Tuesday.
“The software sector values experienced a spectacular rebound (on Monday) following their recent decline,” also noted analysts at Briefing.com.
Oracle soared by 12.71%, CrowdStrike gained 6.13%, and Salesforce rose by 4.73%.
Since the beginning of the year, the sector has been greatly shaken by fears of artificial intelligence undermining its economic model. Some major software names have lost 30% to 50% of their market capitalization in just a few months.
