NEW YORK — Wall Street climbed to the edge of its all-time high on Monday, and stocks rallied worldwide after oil prices and yields in the bond market surrendered their market-rattling gains from last week.
The S&P 500 jumped 1.5% and pulled within 0.4% of its record set last month. The Dow Jones Industrial Average added 366 points, or 0.7%, and the Nasdaq composite leaped 2.3% to its own all-time high as chip stocks and other companies in the artificial-intelligence industry led the way.
Stocks got help from the price for a barrel of Brent oil falling 3.4% to $100.34. While that’s still much higher than its roughly $72 price from earlier this summer, it’s down from the nearly $110 it touched last week.
Oil prices have been swinging up and down as some crude from the Middle East is able to sail through the Strait of Hormuz to get to customers, though nowhere near as much as the industry would like because of the war with Iran.
With big U.S. companies continuing to deliver strong growth in profits that support their stock prices, Morgan Stanley’s Michael Wilson says another leg higher in prices for oil, gasoline and other refined products is the main near-term risk he sees that could keep the U.S. stock market from rising to his forecasted target for the year’s end.
The average price for a gallon of regular gasoline across the United States has already climbed to nearly $4.48, according to AAA. That’s up from less than $4.32 just a week earlier and from $3.18 a year ago.
Monday’s pullback in oil prices helped lower the pressure coming from the bond market. The yield on the 10-year Treasury eased to 4.95% from 5.01% late Friday after crossing above the 5% threshold last week for the first time since 2023.
Yields have been on the rise because of worries about inflation, big debt loads for governments worldwide and other factors. That hurts the economy because high yields make it more expensive not only for the U.S. government to borrow money to pay its bills but also for households and businesses.
Worries remain about how much oil is available for customers worldwide. But ING commodities strategists Ewa Manthey and Warren Patterson wrote in a commentary on Monday that profit-taking by investors after the recent jump in oil prices, together with hopes for discussions at this week’s U.N. General Assembly and at a meeting between China’s and the United States’ leaders, helped improve optimism.
U.S. Treasury Secretary Scott Bessent told reporters following talks Sunday with Chinese Vice Premier He Lifeng in New York that the U.S. had “a very successful engagement” with the Chinese side.
In Beijing, China’s Foreign Ministry on Monday confirmed that Xi Jinping will pay a state visit to the United States between Sept. 23 and 25. Experts and policymakers believe trade, tariffs and AI safety are likely among the topics to be on the agenda.
On Wall Street, AI stocks continued to strengthen following their worldwide slide at the start of last week. Leaders of the industry have recently warned a slowdown is needed in the industry’s development for the safety of humanity.
Even if the industry leans into more measures for safety, some analysts say it will still be hungry for chips to power it all. Advanced Micro Devices rallied 9.9% and saw its total market value hit $1 trillion, while Nvidia added 2.3%.
Stocks enmeshed in the cryptocurrency industry, meanwhile, rallied after bitcoin’s price rose above $86,000 and returned to where it was in January. Coinbase Global climbed 3.5%, and Robinhood Markets rose 2.9%.
Warner Bros. Discovery leaped 10.8% after 12 states and Hollywood writers challenging its buyout by Paramount agreed to settle their lawsuits. Paramount Skydance fell 2.9%.
All told, the S&P 500 rose 114.20 points to 7,764.70. The Dow Jones Industrial Average added 366.19 to 52,048.83, and the Nasdaq composite climbed 599.55 to 27,122.09.
Stock indexes around the world also climbed thanks to the easing of oil prices and bond yields. Indexes gained 0.9% in France, 1.2% in Hong Kong and 1.6% in South Korea.
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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
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