US stocks opened higher on Monday, rebounding after sharp losses in the previous session, as investors reacted to fresh developments in the Middle East conflict and comments from Donald Trump on ongoing negotiations with Iran.
The Dow Jones Industrial Average was up 333 points, or 0.74%, while the S&P 500 gained 0.63% and the Nasdaq 100 rose 0.60%.
The gains follow a bruising week for Wall Street, during which the major indexes logged their fifth consecutive weekly decline, the longest losing streak in nearly four years.
The rebound attempt comes amid continued geopolitical uncertainty, with investors weighing signs of diplomatic engagement against escalating tensions in the region.
Trump’s comments shape sentiment
Trump said that the US was in serious discussions with a “more reasonable regime” to end the war, but reiterated his warning that Iran must reopen the Strait of Hormuz or risk US attacks on key energy infrastructure, including oil wells and power plants.
The situation has intensified in recent days, with Yemen’s Iran-backed Houthi militia entering the conflict and additional US troops deployed to the Middle East.
Pakistan, acting as an intermediary, has indicated that “meaningful talks” could take place in the coming days.
Despite the fragile geopolitical backdrop, some market participants view Monday’s early gains as a technical recovery following last week’s selloff.
Oil surge boosts energy stocks, revives inflation fears
Energy stocks led gains as oil prices extended their rally.
Shares of Exxon Mobil and Chevron rose more than 1% each, tracking higher crude prices fueled by supply concerns linked to the conflict.
The surge in oil prices has also reignited inflation fears, complicating the outlook for monetary policy.
According to CME’s FedWatch Tool, money markets are no longer pricing in any interest rate cuts from the Federal Reserve this year, a sharp shift from expectations of two cuts before the conflict.
Last week’s selloff pushed the Dow Jones Industrial Average into correction territory, with the index closing more than 10% below its record high.
The Nasdaq Composite and the small-cap Russell 2000 have also entered correction territory, while the S&P 500 is hovering just above that threshold.
Morgan Stanley downgraded global equities to “equal weight” from “overweight.”
However, it noted that fund flows into US assets have increased relative to other regions since the conflict began, suggesting the US may still be viewed as a relatively safe haven.
Key data and corporate moves in focus
Investors are also preparing for a busy week of economic data and central bank commentary.
Federal Reserve Chair Jerome Powell and New York Fed President John Williams are scheduled to speak later in the day.
At the same time, key labor market data, including March nonfarm payrolls, is expected to provide further insight into economic conditions.
Among individual stocks, Sysco shares fell 11.92% after the company announced a $29 billion acquisition of catering supplier Jetro Restaurant Depot, including debt.
Meanwhile, aluminum producers rallied, with Alcoa and Century Aluminum gaining 11.47% and 16.95%, respectively, as metal prices hovered near four-year highs.
With markets closed on Friday for the Good Friday holiday, investors are likely to remain focused on geopolitical developments and their implications for inflation, interest rates, and global growth.
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