A drop in oil prices on Monday helped send the US stockmarket to its best day since the war in Iran began.
The S&P 500 climbed 1% for its biggest gain in five weeks. The Dow Jones Industrial Average added 387 points, or 0.8%, and the Nasdaq composite jumped 1.2%.
The driver for markets once again was the price of oil. A barrel of benchmark US crude fell 5.3% to settle at $US93.50, easing some pressure off the economy after topping $US102 earlier in the morning. Brent crude, the international standard, fell 2.8% to $US100.21 per barrel after earlier getting as high as $US106.50.
It's a reprieve, for now at least, after oil prices spiked from roughly $US70 before the United States and Israel began their attacks on Iran. In response, Iran has nearly halted traffic through the narrow Strait of Hormuz, where a fifth of the world's oil typically sails from the Persian Gulf to customers worldwide. That has oil producers cutting production because their crude has nowhere to go.
Oil worries remain
The worry in financial markets is that if the strait remains closed for a long time, it could keep enough oil off the market to drive inflation up to a debilitating level for the global economy.
US President Donald Trump over the weekend demanded that other countries hurt by the closure of the Strait of Hormuz "take care of that passage" and said his country "will help - A LOT!"
European countries, meanwhile, want to know more about Trump's plans for the war on Iran and when the conflict might end as they weighed his demand.
The US stockmarket has a track record of bouncing back relatively quickly from military conflicts in the Middle East and elsewhere, as long as oil prices don't stay too high for too long. Many professional investors are expecting that to be the case again, which has helped keep US stock prices near their record levels.
For all its dramatic swings over the last couple weeks, including several that struck hour to hour, the S&P 500 is only 4% below its all-time high.
On Wall Street, stocks of companies with big fuel bills helped lead the market thanks to falling oil prices.
Nvidia, whose chips are powering much of the world's move into artificial-intelligence technology rose 1.6% as its CEO, Jensen Huang, talked up the tech's possibilities at an AI conference and said he foresaw $US 1 trillion in demand for AI chips through 2027. It was the strongest single force lifting the S&P 500.
All told, the S&P 500 rose 67.19 points to 6,699.38. The Dow Jones Industrial Average added 387.94 to 46,946.41, and the Nasdaq composite climbed 268.82 to 22,374.18.
The Associated Press
