Stocks Soar as Middle East Tensions Ease and Oil Prices Plummet
Stocks rallied on Monday as Middle East tensions eased and crude oil prices plummeted over 5%. The S&P 500 Index closed up 1.48%, its highest level in two months, while the Dow Jones Industrial Average rose 1.32% to a three-and-a-half-week high.
The decline in oil prices knocked bond yields lower, supporting stocks. The 10-year T-note yield fell 5 basis points to 4.68%. The easing of tensions also contributed to the rally, with President Trump calling off a planned attack on Iran and Saudi Arabia's Crown Prince Mohammed bin Salman holding talks with Trump over the weekend.
US economic data was also positive, with the July ISM manufacturing index rising 2.3% to 55.6, its fastest pace of expansion in four years. The upbeat earnings season continued, with 86% of S&P 500 companies beating estimates, according to Bloomberg data.