U.S. stocks edged higher on Monday as investors cautiously returned to risk assets while monitoring developments around the Strait of Hormuz and the ongoing Middle East conflict. The Dow Jones Industrial Average climbed roughly 0.9%, while the S&P 500 gained about 1.1% and the tech-heavy Nasdaq Composite advanced around 1.3%, extending a rebound after a volatile stretch for equities last week.
Markets found some relief as several tankers successfully passed through the Strait of Hormuz over the weekend, raising hopes that the critical oil shipping route could gradually reopen. The prospect of easing supply disruptions helped steady investor sentiment even as geopolitical tensions remain elevated and energy markets continue to swing sharply.
Market Movers:
- Meta Platforms (META) +3% – Shares rose alongside other megacap technology names as investors rotated back into growth stocks. The company also drew attention after committing up to $27 billion over five years to access advanced AI infrastructure from Nebius while reportedly considering workforce reductions to offset heavy AI spending.
- Nebius Group (NBIS) +14% – The stock surged after securing a major AI infrastructure agreement with Meta Platforms. The deal will provide billions in capacity tied to Nvidia’s Vera Rubin platform, with large-scale deployment expected to begin in 2027.
- Micron Technology (MU) +5% – Shares gained after the chipmaker announced plans to build a second manufacturing facility at its Tongluo site in Taiwan. The expansion will boost production capacity for DRAM and high-bandwidth memory products used in artificial intelligence workloads.
- HIVE Digital Technologies (HIVE) +4.2% – The crypto-linked firm moved higher after unveiling plans to quadruple its liquid-cooled AI data center capacity in Canada. The expansion includes a new colocation facility in British Columbia and additional computing capacity tied to AI workloads.
- MARA Holdings (MARA) +1.5% – Shares edged higher as Bitcoin climbed above the $74,000 level, lifting sentiment across the crypto mining sector. The rally in digital assets has helped restore some investor confidence after weeks of volatility tied to geopolitical tensions.
- 10x Genomics (TXG) -7.6% – Shares fell sharply after Ark Invest reduced its position in the company, selling hundreds of thousands of shares across multiple funds. The move sparked concerns among investors about institutional demand for the stock.
- VNET Group (VNET) -8% – The data center operator declined following mixed quarterly results and a weaker outlook. While adjusted EBITDA improved year over year, declining capacity utilization raised questions about near-term growth momentum.
Oil Volatility and the Strait of Hormuz
Energy markets remain the biggest driver of global sentiment as the Middle East conflict enters its third week. Crude oil briefly surged above $100 per barrel earlier Monday before pulling back, with U.S. benchmark West Texas Intermediate trading near $95 while Brent crude held above $102.
The Strait of Hormuz, a critical artery for global oil shipments, has become the focal point for markets. Several tankers successfully navigating the waterway over the weekend provided cautious optimism that supply disruptions may ease, though the situation remains fragile. Even temporary disruptions can ripple through inflation expectations, corporate costs, and consumer spending, underscoring the region’s crucial role for financial markets.
Federal Reserve in Focus
Investors are also preparing for the Federal Reserve’s two-day policy meeting this week, where policymakers are widely expected to leave interest rates unchanged. However, the recent surge in oil prices has complicated the inflation outlook, potentially deepening internal debates among officials over when interest rate cuts might resume. Higher energy prices could push inflation metrics upward in the coming months, particularly if supply disruptions persist. That dynamic may force the central bank to remain cautious even as other economic indicators, including parts of the labor market, show signs of cooling.
Market Signals and Sector Rotation
Under the surface of Monday’s rally, sector leadership has been shifting throughout the session. Small-cap stocks initially led the move higher, though large-cap technology companies later carried more of the market’s momentum as investors gravitated back toward megacap names. Transportation stocks also attempted a rebound after a difficult month, with airlines, logistics firms, and rideshare companies posting gains. Despite Monday’s bounce, the broader transportation index remains sharply lower for the month, highlighting ongoing concerns about economic growth and fuel costs.
Looking Ahead
Investors will continue watching developments around the Strait of Hormuz, movements in oil prices, and signals from the Federal Reserve’s policy meeting this week. A clearer outlook for energy markets and interest rates could determine whether Monday’s rebound builds into a broader recovery or gives way to renewed volatility across equities.