Easing tensions lift Wall Street
US stocks have kicked off August on a strong note to send the Dow Industrials to a closing record high as signs of de-escalating US-Iran tensions pulled down oil prices and Treasury yields in a busy week for earnings and economic data.
Crude prices settled down about 5.0 per cent after US President Donald Trump said on Sunday that talks with Iran to reopen the Strait of Hormuz would take place on Monday although Iran disputed that talks were planned.
The drop in oil prices helped push US Treasury yields lower even as market participants continued to gauge the odds of a rate hike from the Federal Reserve should the Iran war continue for a prolonged period.
Communication services was the best performing of the 11 major S&P sectors, climbing 4.3 per cent on the back of gains from Meta Platforms and Alphabet.
Energy dropped 1.2 per cent as the worst performer on the session.
Strong earnings fuel gains
Earnings have been strong this quarter, showing a 29.3 per cent growth rate from the 304 companies in the S&P 500 that have reported earnings through Friday, according to LSEG data, with 85.2 per cent topping analyst expectations.
Amazon shares advanced 4.6 per cent as the company's market cap surpassed $US3 trillion ($A4.3 trillion) for the first time after its earnings results last week.
SpaceX, which will report on Tuesday its first quarterly results since going public, jumped 5.6 per cent.
The stock has been trading below its $US135 issue price for nearly three weeks after its debut in mid-June.
The Dow Jones Industrial Average rose 693.38 points, or 1.32 per cent, to 53,178.41, the S&P 500 gained 110.78 points, or 1.48 per cent, to 7,600.50 and the Nasdaq Composite gained 540.04 points, or 2.13 per cent, to 25,913.90.
Rate outlook remains in focus
Stocks struggled in July partly due to global concerns about the AI trajectory, the US-Iran conflict and the path of interest rates from the Fed.
New York Federal Reserve president John Williams expressed optimism that inflation pressures would ease gradually.
A report last week that US Fed chair Kevin Warsh raised the idea of scheduling fewer rate-setting meetings added to concerns about less clarity around the central bank.
Markets are pricing in a 64.5 per cent chance for a rate hike of at least 25 basis points at the Fed's September meeting, according to CME FedWatch.
Investors will receive several readings on the labour market this week, culminating with the government jobs report on Friday.
Market breadth strengthens
Advancing issues outnumbered decliners by a 2.62-to-1 ratio on the NYSE and by a 3.01-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and one new low while the Nasdaq Composite recorded 121 new highs and 96 new lows.
Volume on US exchanges was 19.36 billion shares, compared with the 17.66 billion average for the full session over the last 20 trading days.
