U.S. stocks rose in early trading on Monday, as a rise in the price of crude oil lifted energy stocks, though uncertainty remained across a variety of geopolitical issues.
How are the main benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.75% rose 178 points, or 0.7%, to 24,439. The S&P 500 SPX, +0.50% added 16 points to 2,679, a gain of 0.6%. The Nasdaq Composite Index COMP, +0.85% rose 56 points, or 0.8%, to 7,266.
The day’s gain built on a sharp rally in Friday’s session, which was the largest for the Dow since April 10. However, the average has struggled lately, falling in nine of the past 13 sessions, not including Monday.
The day’s gains were broad, with 10 of the 11 S&P 500 sectors higher on the day. Energy was by far the biggest gainer, up 1.5%.
What’s driving markets?
Oil prices climbed above $70 a barrel on Monday, their highest level since 2014. With crude futures rising, investors were likely to keep a close eye on comments linked to the Iran nuclear deal. U.S. President Donald Trump must decide by next weekend, May 12, whether to abandon the deal. Such a move would trigger a reimposition of economic sanctions on Iran, hampering oil exports from the country and cutting global supply.
Global trade headlines will also be in focus for investors, after a team of U.S. negotiators appeared to garner no deal out of talks with counterparts in Beijing. China state media indicated that talks were positive, and more negotiations would be needed to avoid a trade war, the South China Morning Post reported.
Read: After earnings barrage and data, stock-market moves now hinge on global trade
A trio of Fed members are slated to speak on Monday, which could give further clues to the direction of interest rates. Richmond Federal President Tom Barkin is scheduled to speak at George Mason University in Fairfax, Va., at 2 p.m. Eastern Time.
Chicago Federal Reserve Bank President Charles Evans and Dallas Fed President Robert Kaplan will both speak at the 23rd Annual Financial Markets Conference in Amelia Island, Fla., at 3:30 p.m. Eastern.
What are strategists saying?
“It seems that the possible re-escalation of geopolitical risks between U.S. and Iran doesn’t affect market participants’ bias at this time. However, this notion will be put to the test as we draw closer to the deciding May 12 date when Trump has to recertify the JCPOA (Joint Comprehensive Plan of Action) deal so we believe that investors should keep their guard up for the rest of the week,” said Konstantinos Anthis, head of research at ADS Securities, in a note to clients.
Which stocks are in focus?
Energy stocks rose broadly alongside the gain in oil. Chevron Corp. CVX, +1.79% and Exxon Mobil Corp. XOM, +2.22% both gained 1.3%, while ConocoPhillips COP, +2.14% was up 1.7%.
The first-quarter earnings season remains in focus, though the vast majority of S&P 500 companies have already posted their results.
Tyson Foods Inc. TSN, +1.19% reported quarterly earnings and sales that missed analyst forecasts. Shares rose 1.1%.
Sempra Energy SRE, -0.17% unexpectedly reported a drop in its first-quarter revenue. Adjusted earnings also came in below forecasts. The stock fell 0.7%.
Sysco Corp. SYY, +1.55% inched up 0.2% after it reported earnings that came in above expectations.
Cognizant Technology Solutions Corp. CTSH, -5.98% sank 4.9% after it provided an outlook that was below expectations.
Starbucks Corp. SBUX, -0.05% rose 0.1% after Nestlé SA NSRGY, +1.26% NESN, +1.62% said it has reached a deal to market the coffee chain’s consumer and food service products. Starbucks will receive a $7.15 billion upfront payment as part of the deal.
Athenahealth Inc. ATHN, +21.87% jumped 23% after CNBC reported that Elliott Management plans to make a $7 billion bid for the company.
Gramercy Property Trust GPT, +15.51% surged 15.5% after the commercial real-estate asset management company said it would be acquired by Blackstone Group LP BX, +0.33% in a cash deal valued at $7.6 billion.
Shares of International Flavors & Fragrances Inc. IFF, -6.63% fell 4.4% after announcing a $7.1 billion stock-and-cash deal to acquire Israel-based Frutarom Industries, Ltd. FRUT, +0.00%
Shares of Berkshire Hathaway Inc. BRK.A, +0.80% BRK.B, +0.26% rose 0.9% after the multinational conglomerate said over the weekend it swung to a rare loss in the first quarter due to lower insurance premiums and an accounting rule change.
At the Berkshire shareholder meeting on Saturday, chairman Warren Buffett commented on a range of topics. He applauded Apple Inc.’s AAPL, +2.04% share buybacks, defended a stake in Wells Fargo & Co. WFC, +0.15% and explained why he doesn’t invest in Microsoft Corp. MSFT, +1.06% shares. He said bonds are a ‘terrible investment’ near current yields and cryptocurrencies “will come to bad endings.”
Plus: Buffett on why Berkshire invests in gun stocks
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What are other markets doing?
European stocks SXXP, +0.48% SXXP, +0.48% climbed, while Asian stocks finished mostly higher.
U.S. oil prices CLM8, +1.06% rose 0.7% while the ICE Dollar Index DXY, +0.18% climbed to a four-month high, up 0.3%. Gold prices GCM8, -0.03% were modestly lower, down 0.1%.