S&P 500 jump 1%, Dow Jones gain 388 points as oil falls

US stocks closed higher on Monday as investors returned to equities after several weeks of pressure linked to the escalating Iran conflict, while oil prices declined from recent highs.

The Dow Jones Industrial Average gained 387.94 points, or 0.83%, to close at 46,946.41.

The S&P 500 rose 1.01% to 6,699.38, marking its strongest one-day gain in more than a month, while the Nasdaq Composite advanced 1.22% to 22,374.18.

The rebound followed three consecutive weekly declines for the S&P 500, which had closed at its lowest level of the year on Friday.

Technology and artificial intelligence-linked stocks helped lead the rally.

Meta Platforms climbed 2.3% after a report said the company is preparing to cut at least 20% of its workforce, while Nvidia rose 1.6% as its annual GTC developer conference began.

Other AI-related companies also advanced, including Micron Technology, which jumped 3.7% after announcing plans to build a second manufacturing facility in Taiwan.

Oil prices retreat after recent surge

Oil prices eased on Monday after surging above $100 per barrel last week, when the conflict involving Iran disrupted shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.

West Texas Intermediate crude fell 3.9% to settle at $93.10 per barrel, after briefly trading above $100 overnight.

Brent crude declined 2.43% to $100.70 per barrel.

Prices retreated after Treasury Secretary Scott Bessent said the United States was allowing Iranian oil tankers to pass through the Strait of Hormuz.

A report in the Wall Street Journal also suggested that the US was working to form a coalition of countries to escort ships through the waterway.

However, uncertainty around the geopolitical situation remains high.

President Donald Trump ordered strikes on Iranian military assets located on Kharg Island on Friday. While the attack did not affect oil infrastructure, Trump said the United States could target those facilities if Iran continues to block the Strait.

AI stocks and lower oil prices support markets

A modest pullback in crude prices also helped boost sectors sensitive to energy costs.

Travel companies such as Delta Air Lines and Norwegian Cruise Line Holdings rose 3.5% and 5.1%, respectively, benefiting from lower fuel costs.

Other notable movers included Strategy Inc, which climbed 5.6% as bitcoin gained roughly 3%, and Dollar Tree, which rose 6.4% after indicating it could benefit from favorable tariff policies.

Technology stocks also supported the broader market rally.

Tesla gained 1.1% after CEO Elon Musk said the company’s Terafab AI chip project could launch in seven days.

Despite the gains, analysts said uncertainty related to the Middle East conflict continues to weigh on investor sentiment.

Markets rebound but caution remains

Monday’s rally came on relatively light trading volume.

Total trading on US exchanges reached 17.4 billion shares, below the 20-session average of 19.9 billion shares, suggesting limited conviction behind the rebound.

Nevertheless, the gains were broad-based.

All 11 S&P 500 sectors finished higher, led by information technology, which rose 1.39%, followed by consumer discretionary, up 1.34%.

Market volatility also eased slightly, with the CBOE Volatility Index (VIX) dropping 3.5 points to 23.7.

Advancing stocks outnumbered decliners by more than three-to-one on the S&P 500.

Despite recent market turbulence, US equities have held up better than many global markets, partly supported by strength in technology stocks and the country’s position as a net oil exporter.

However, the S&P 500 remains about 2% lower so far in 2026, reflecting ongoing geopolitical and economic uncertainty.