US Stocks Rebound As Trump Claims "Productive" US-Iran Talks
NEW YORK, March 24 (Bernama-Xinhua) -- US stocks saw solid growth on Monday as reports of potential diplomatic progress in the Middle East sparked a sharp pullback in oil prices and revived investor risk appetite, reported Xinhua.
The Dow Jones Industrial Average rose 1.38 per cent to 46,208.47. The S&P 500 added 1.15 per cent to 6,581. The Nasdaq Composite Index increased by 1.38 per cent to 21,946.76. At their intraday peaks, all three leading indexes had rallied more than 2 per cent.
All 11 primary S&P 500 sectors ended in the green. The consumer discretionary and materials sectors led the gainers, rising 2.46 per cent and 1.49 per cent, respectively. The health sector recorded the weakest growth, edging up by just 0.03 per cent.
Market sentiment shifted dramatically after US President Donald Trump said on social media that the United States and Iran had engaged in "very good and productive conversations" over the past two days regarding a total resolution of hostilities in the Middle East.
Trump added that he instructed the Pentagon to postpone all military strikes against Iranian power plants and energy infrastructure for five days. However, Iranian state media subsequently denied that any negotiations had taken place.
Oil futures prices pulled back sharply from early morning surges. US benchmark West Texas Intermediate crude futures sank 10.28 per cent to settle at US$88.13 a barrel. Meanwhile, global benchmark Brent crude pulled below 100 dollars per barrel after topping US$113 in premarket trading.
The sudden drop in energy costs triggered a broad rally in travel and leisure equities. Shares of major US carriers, including Delta Air Lines, United Airlines and American Airlines, alongside cruise operators Carnival, Royal Caribbean and Norwegian Cruise Line, all advanced significantly.
In the technology sector, the "Magnificent Seven" mega-cap stocks rebounded after finishing lower for three consecutive sessions, with Tesla leading the group's gains at 3.5 per cent.
Despite the day's market optimism, some financial institutions maintain a cautious economic outlook. Goldman Sachs economists on Monday raised their US recession probability to 30 per cent, up from 25 per cent just last week, citing the broader economic impact of recent oil price volatility.
Goldman Sachs chief economist Jan Hatzius noted that the firm's upward revision to oil and gas forecasts is expected to increase global headline inflation by approximately 1 percentage point and subtract 0.4 percentage points from global gross domestic product growth.
"While the energy hit to US growth is likely on the smaller side, it coincides with tighter financial conditions and a waning fiscal boost in H2," wrote Hatzius.
--BERNAMA-XINHUA