The New York stock market rose across the board on Monday, bucking fears of geopolitical turmoil.
Concerns of a wider Middle East conflict had escalated after U.S. airstrikes on three Iranian nuclear sites on June 21, followed by Iran’s parliamentary vote to potentially close the Strait of Hormuz on June 22. However, as both nations appeared to exercise restraint, investor confidence rebounded.
Tesla shares surged over 8% following the launch of its robotaxi pilot service in Austin, Texas.
Broad-based Gains
All three major indices closed higher.
The Dow Jones Industrial Average climbed 374.96 points (0.89%) to finish at 42,581.78.
The S&P 500 reclaimed the 6,000 mark, advancing 57.33 points (0.96%) to 6,025.17.
The Nasdaq Composite rose 183.57 points (0.94%) to close at 19,630.98.
The CBOE Volatility Index, Wall Street’s fear gauge, dipped below the psychological resistance level of 20, falling 0.79 points (3.93%) to 19.83.
By sector, energy stocks were the sole losers, dropping 2.5% as oil prices plummeted over 7%. Oil companies like ExxonMobil, Chevron, and Occidental saw their shares fall around 3%. The remaining ten sectors posted significant gains.
U.S. and Iran Avoid Escalation
Despite U.S. warnings about potential Iranian retaliation, both countries showed clear signs of avoiding escalation.
In a surprising display of restraint, both sides appeared to provide advance notice before airstrikes, minimizing the risk of casualties.
U.S. President Donald Trump revealed that Iran had given prior warning before attacking U.S. military bases in Qatar and Iraq, preventing any deaths.
Trump had earlier disclosed that the U.S. had informed Iran about the June 21 strikes on its nuclear facilities.
The unexpected restraint from both sides eased tensions and left room for potential negotiations, boosting market sentiment.
Tesla’s Robotaxi Launch Fuels 8% Surge
Tesla’s stock closed up 26.52 USD (8.23%) to 348.68 USD as investors cheered the launch of its robotaxi service.
There had been concerns that the stock might fall on Monday in line with the sell-the-news reaction, especially since the stock had already surged over 30% after CEO Elon Musk announced on April 22 the launch of robotaxi in June.
However, skepticism persists amid the stock’s rally.
A new Texas law, effective September 1, could pose regulatory hurdles for Tesla by allowing the cancellation of autonomous vehicle registrations.
Additionally, Alphabet’s Waymo leads the robotaxi race, operating over 250,000 weekly rides in various U.S. cities like Austin and San Francisco, and is seeking New York City permits.
Tech Giants Mixed; Alphabet and Amazon Slip
Most of the Magnificent Seven tech stocks performed well.
Nvidia and Apple recovered from mid-session weakness to close higher.
Nvidia edged up 0.32 USD (0.22%) to 144.17 USD, while Apple gained 0.50 USD (0.25%) to 201.50 USD.
Microsoft jumped 8.60 USD (1.80%) to 486.00 USD, and Meta Platforms surged 16.18 USD (2.37%) to 698.53 USD.
Palantir, popular among Korean investors but not part of the Magnificent Seven, rose 2.62 USD (1.91%) to 139.92 USD.
Bucking the trend, Alphabet fell 1.72 USD (1.03%) to 166.01 USD, and Amazon slipped 1.22 USD (0.58%) to 208.47 USD.
