Oil Price Rally Ignites Market Amid Geopolitical Volatility

Last week's market performance was downbeat due to renewed tensions in the Middle East and an oil price rally. The S&P 500 lost 0.6%, the Dow Jones retreated about 0.4%, and the Nasdaq Composite plunged 2.1%. Despite geopolitical volatility, big banks continued to post strong results driven by solid trading activity, consumer spending, loan demand, capital market activity, higher investment banking fees, and a pickup in AI-driven capital markets activity.

The United States Brent Oil Fund LP BNO added 8% last week as a result of the oil price rally. However, Iran reportedly said it would halt its attacks if the US pause in hostilities remains in effect, as quoted on CNBC. The key highlight was the strong performance of several ETFs, including Invesco DB Oil Fund DBO, which rose by 10.5%, and CoinShares Bitcoin Mining ETF WGMI, up 6.5%.

However, tech stocks were hit hard due to renewed worries related to massive AI investments. Alphabet faced a sell-off in its stock after delivering strong revenue growth and highlighting a growing cloud-services backlog but also sharply higher AI infrastructure spending. Tesla also struggled with concerns about the commercial viability of its humanoid robots, Optimus.