Dow climbs 95 points as AI-fueled tech rally offsets oil surge, Iran fears

• AI semiconductor stocks led the rally: Micron jumped 6.5%, Nvidia gained nearly 2%, and Intel rose over 1%, extending a six-week winning streak for major indexes.
• Oil prices spiked sharply with WTI crude climbing 2.78% to $98.07 and Brent reaching $104.20 per barrel after Trump called Iran's peace proposal 'TOTALLY UNACCEPTABLE', raising supply disruption fears.
• First-quarter earnings remain strong with 83% of reporting S&P 500 companies beating estimates and aggregate earnings growth now projected at 28.6% year-over-year, nearly double the April forecast of 14.4%.

Market Summary

Market Performance:

U.S. equities closed higher Monday, with the S&P 500 rising 0.19% to 7,412.84 and the Nasdaq gaining 0.1% to 26,274.13—both reaching fresh all-time highs. The Dow Jones added 95.31 points (0.19%) to close at 49,704.47. This continues a strong trend, with both the S&P 500 and Nasdaq recording their sixth consecutive weekly gain, the longest streak since 2024.

Key Drivers:

AI-linked technology stocks fueled the rally. Nvidia advanced nearly 2%, while Micron Technology surged 6.5%. Intel also posted gains following reports of a chip-packaging partnership with SK Hynix and a preliminary chipmaking deal with Apple. The semiconductor sector continues benefiting from AI infrastructure spending momentum.

Geopolitical Tensions:

President Trump rejected Iran's latest peace proposal, escalating Middle East tensions and pushing oil prices sharply higher. West Texas Intermediate crude jumped 2.78% to $98.07 per barrel, while Brent crude rose 2.88% to $104.20. The oil surge raises inflation concerns, particularly regarding gasoline costs and consumer spending.

Earnings & Economic Outlook:

First-quarter earnings season shows strong results: 83% of the 440 reporting S&P 500 companies have beaten expectations. Aggregate Q1 earnings growth now stands at 28.6% year-over-year, well above the 14.4% forecast from early April. Investors are awaiting upcoming economic data including CPI, retail sales, producer prices, and industrial production figures.

Market Implications:

The AI rally remains the dominant market force, offsetting geopolitical risks. However, rising oil prices and potential inflation pressures could challenge the bullish sentiment. Attention shifts toward Trump's upcoming Beijing meeting with President Xi Jinping, covering trade, AI, Taiwan, and critical minerals discussions.