Wall Street surged on Monday
and oil prices settled around pre-Iran war levels, as investors
eyed new developments in the AI and chipmaker sector ahead of
corporate earnings.
All three major U.S. indexes ended the day higher. The Dow
Jones Industrial Average ended the day up 0.29 per cent, while
the S&P 500 jumped 0.72 per cent and the Nasdaq Composite
climbed 1.12 per cent.
MSCI’s gauge of stocks across the globe
rose 0.41 per cent.
The global AI boom continued to dominate markets. South Korean
chipmaker SK Hynix 000660.KS on Monday launched a U.S. share
sale to raise 43 trillion won ($28.07 billion) and drew
indications of interest for up to $7 billion from major
investors. And Broadcom announced it had expanded its
partnership with Apple to develop and supply custom
chips through 2031.
Elsewhere, Microsoft joined the trend of tech layoffs,
announcing it would eliminate around 4,800 jobs, roughly 2.1% of
its global workforce. Investors will be watching closely for how
artificial intelligence-related companies are faring amid some
fears about a bubble in the upcoming earnings season.
Delta Air Lines and PepsiCo are the big U.S.
names reporting this week. Samsung Electronics is
set to make a splash on Tuesday as analysts expect an 18-fold
increase in profit.
Oil holds steady
Oil prices were flat on Monday, as prices lingered around
pre-Iran war levels. U.S. crude was steady at $68.69 a
barrel and Brent fell just 0.03 per cent to $72.10 per barrel.
While there were no new developments in the fractious U.S.-Iran
peace talks, ships are passing through the Strait of Hormuz,
with 160 vessels reported transiting from Monday to Saturday of
last week. Meanwhile, Saudi Arabia slashed its official selling
prices, and OPEC+ approved another production target increase
starting in August.
Calming in oil prices looks to be extending some relief to
the private sector, as the decline helped to slow the pace of
increase in services inflation, according to new data from the
Institute for Supply Management. The ISM reported that U.S.
services sector activity dipped in June, but employment
rebounded after contracting for three straight months.
U.S. President Donald Trump will attend a NATO meeting in Turkey
this week, and Fed watchers will get another glimpse into how
new Chairman Kevin Warsh steers the central bank when it
releases Federal Open Market Committee minutes on Wednesday, the
first of his tenure.
Analysts expect Warsh to limit clues as to future interest rate
moves, but Fed Governor Christopher Waller defended forward
guidance in remarks on Monday, saying it can be a “valuable
tool” under the right circumstances.
The yield on benchmark U.S. 10-year notes fell
0.77 basis point to 4.471 per cent, from 4.479 per cent late on Thursday.
In currency markets, the dollar index fell slightly, dipping
0.01% to 100.86, treading water in the wake of Thursday’s
weaker-than-expected June U.S. payrolls report. The dollar
firmed 0.44 per cent to 162.08 yen, not far from 40-year peaks
of 162.84, as speculators test Japanese authorities’ resolve on
intervention.
In commodity markets, gold was 0.29 per cent lower at $4,163.10 an
ounce, after bouncing 2 per cent last week.