Oil Price Plunge Sparks US Stock Rally Near Record High
US stocks rallied to near-record levels on Monday after oil prices fell sharply, easing concerns about inflation. The S&P 500 rose 1.5% and is just 0.1% below its record high set earlier this summer.
The Dow Jones Industrial Average surged 649 points, or 1.2%, while the Nasdaq composite gained 2.2%. The price of Brent crude oil dropped by 5% to $83.52 per barrel after US President Donald Trump said he would hold off on new strikes against Iran at the urging of regional allies.
The decline in oil prices helped airlines and other companies with significant fuel costs lead the market. United Airlines jumped 5.5%, American Airlines climbed 4.7%, and Norwegian Cruise Line Holdings rose 4.5%. Boeing soared 7.2% after its new 737 MAX-7 planes were certified for commercial service.
US Treasury yields also fell, dropping to 4.68% from 4.75% on Friday. This decline in yields was a positive sign for the stock market, as higher yields can make borrowing more expensive and slow down the economy.