US stocks rose on Monday as concerns about the repercussions of the Iranian attack on Israel eased, allowing the focus to return to earnings season and inflation risks to hopes of lower interest rates.
The S&P 500 (^GSPC) added nearly 0.5%, while the Dow Jones Industrial Average (^DJI) rose 0.5%, or more than 360 points, after ending the week with sharp losses. The Nasdaq Composite (^IXIC) rose 0.4%.
The focus is shifting as investors shrug off initial fears of an all-out war in the Middle East following Iran's direct missile and drone strike on Israel on Saturday. Efforts by the United States to encourage Israel not to retaliate helped calm nerves, in part because the well-dispatched attack allowed the damage to be contained.
Stocks have been under pressure in recent days with earnings season off to a lackluster start and concerns persisting that inflation will stall short of the Federal Reserve's 2% target. Traders have trimmed their bets on the depth of the Federal Reserve's interest rate cuts this year in the face of disappointing economic data.
Retail sales in March rose 0.7% from the previous month, as consumers continued to spend despite rising interest rates. The monthly reading exceeded economists' expectations for an increase of 0.4%, according to Bloomberg data.
Goldman Sachs (GS) on Monday got off to an upbeat start to this week's earnings, as investors look to corporate results to revive stocks' early 2024 rally. Shares of the Wall Street bank rose more than 5% after first-quarter earnings jumped to beat estimates.
In commodities, oil prices fell more than 1% on Monday after rising ahead of the Iranian air strike. West Texas Intermediate crude futures (CL=F) were trading at around $85 per barrel, while Brent crude futures (BZ=F) approached the $90 level.
Meanwhile, the 10-year Treasury yield (^TNX) added about 10 basis points to trade near 4.61%, rebounding from Friday's sharp decline to look to return to a five-month high last week. Fellow safe haven gold (GC=F) fell after rising as much as 1.2% last week as tensions escalated in the Middle East.
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