Stocks climb as oil tumbles on eased Iran tensions: Monday recap

U.S. stocks opened August with a broad rally. The S&P 500 rose 1.4% to 7,600.50. The Dow Jones Industrial Average climbed 1.3% to 53,178.41. The Nasdaq Composite led the major averages, up 1.8% to 25,913.90, as large technology shares set the pace. The advance was wide. Buyers pushed nearly every corner of the market higher, and the strongest gains landed in the growth-oriented names that anchor the technology and communication sectors.

The sector map leaned firmly to the upside. Communication services was the day’s clear leader, up 2.9%, followed by industrials at 1.9% and consumer discretionary at 1.8%. Technology rose 1.5%, materials added 1.2%, and financials gained 0.8%, a sign that the buying reached well past the biggest growth names. Energy was the exception. The sector fell 1.3%, the only meaningful decliner on the board, as crude oil prices dropped. Consumer staples and health care each eased less than a quarter of a percent, leaving them the next-weakest groups in an otherwise green session.

Oil set the tone. Crude prices fell sharply, sliding roughly 6% and dropping back below $80 a barrel, after President Trump said he had held off a planned military strike against Iran to pursue negotiations. The retreat in energy costs cooled worries about inflation, and that relief rippled across the equity market. Rate-sensitive growth stocks drew the clearest benefit, while energy producers moved the other way as the price of their main product sank. Lower fuel costs tend to reach consumers and businesses alike, and the prospect of a calmer oil market gave investors reason to add risk as a new month began. Traders also had a heavy slate of corporate earnings ahead, which kept sentiment tilted toward the companies seen as benefiting from steady technology spending.

Beneath the headline gains, breadth was healthy. The Russell 2000’s tracker rose 1.7%, keeping smaller companies in step with the large-cap indexes rather than trailing them as they often have this summer. That even participation suggests the buying was not confined to a handful of megacaps. Volatility drifted lower. The Cboe Volatility Index settled at 15.86, a subdued reading that points to continued calm in the options market. The 10-year Treasury yield stood at 4.68%, little changed on the day, with commodities and corporate earnings holding the market’s attention. The advance built on a firm prior week, over which the S&P 500’s tracker had already added about 2.5%. The week’s sector leadership pointed the same way as Monday’s tape, with consumer discretionary up more than 6% over the past five sessions and utilities the clear laggard, down close to 3%.

The calendar is full. The week ahead brings a fresh run of quarterly results and economic data, including updates on the labor market and the service sector. Developments between Washington and Tehran are likely to keep steering oil prices, and with them the energy sector and the near-term inflation picture. Markets will take their cues from that mix as August trading gets underway, with the pace of corporate spending and the direction of interest rates still central to the outlook.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.