US stocks saw a significant rally on the first trading day of the month, with the S&P 500 Index advancing 1% and the Nasdaq 100 Index rising 0.6% by 10:14 a.m. in New York. The S&P 500 is now just 0.1% below its all-time high set earlier this summer. This positive sentiment was partly driven by the focus shifting back to a heavy slate of earnings reports scheduled for the week.
A major contributor to the market's strength was Amazon.com Inc., which saw its shares surge after strong results, pushing its market capitalization past the $3 trillion threshold. This makes Amazon only the fifth company to ever achieve this milestone. The company's rally was fueled by a surge in cloud growth, particularly from strong artificial intelligence demand, and it reported adjusted earnings per share of $1.97 on revenue of $200.61 billion, beating analyst estimates.
Falling oil prices also played a crucial role in boosting market sentiment. West Texas Intermediate crude fell 6.4% to trade around $79, and Brent crude sank 5% to $83.52, after President Donald Trump called off a planned attack on Iran. This easing of Middle East tensions and subsequent drop in oil prices helped calm Wall Street's worries about inflation. Additionally, the fastest US manufacturing activity expansion in over four years further lifted stocks.
Despite the broad market rally, the semiconductor sector experienced a downturn. Top companies like Micron Technology Inc. and Broadcom Inc. retreated, causing the Philadelphia Semiconductor Index (SOX) to fall 1.9%. The market will continue to focus on upcoming earnings reports as a primary driver for further movements.
