Global stock markets experienced a resurgence on Monday, with Wall Street futures advancing, particularly in the AI sector. This upward trend was significantly influenced by a more than 3% drop in oil prices, which alleviated pressure on equities and caused the 10-year US bond yield to fall below the 5% mark. European stock markets also recouped losses, with the Stoxx Europe 600 rising by 1.1%.
The decline in oil prices, with Brent crude falling over 3% to $100.20 a barrel and West Texas Intermediate dropping below $97 a barrel, was attributed to renewed hopes for diplomatic progress in the Middle East conflict. US President Donald Trump indicated he would "probably be open" to meeting Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly this week. This sentiment led investors to believe that geopolitical risk premiums on oil were decreasing.
In the tech sector, AI stocks were a major driver of market gains. Intel rose 5.4% (or 9% in some reports), Marvell added 2.6%, Meta climbed 2.4% (or 6.2% as per some reports), and Dell advanced 2.7%. Accenture gained 6% (or 3.5% in other reports) after announcing a $2 billion investment and partnership with Anthropic for AI evaluation. Advanced Micro Devices surged 8.5%, reaching a market valuation of $1 trillion, and Micron also saw gains of 3%.
The bond market also rallied, with European government bonds leading the gains. France's 10-year yield decreased by 0.13 percentage points to 4.45%, and Italy's 10-year yield fell by 0.11 percentage points to 4.33%. This shift indicated investors moving from riskier assets to safer sovereign debt. Despite the positive market reaction, some investors remained cautious about the interest-rate outlook, with a 50% chance of another Fed rate hike next month anticipated after recent inflation data.
Optimism regarding a potential diplomatic breakthrough between the United States and Denmark over Greenland also contributed to the positive market sentiment. Additionally, Paramount Skydance gained 6.5% following reports of a settlement in lawsuits aimed at blocking its $110 billion merger with Warner Bros Discovery. The Dow Jones Industrial Average rose 241.25 points (0.47%) to 51,923.89, the S&P 500 gained 70.38 points (0.92%) to 7,720.88, and the Nasdaq Composite added 393.21 points (1.48%) to 26,915.76.
