Dow rises as US-Iran talks progress; investors await key inflation data

• Oil prices reversed early gains, with Brent crude falling 1.6% to $79.30 and WTI down 0.8% to $76 after US-Iran negotiators agreed on a 60-day roadmap toward a final deal
• Markets have priced in potential Fed rate increases as early as September or October following last week's hawkish Fed meeting, with the two-year Treasury yield climbing to 4.230%
• Chip stocks including Micron, Sandisk, and Intel rose ahead of key inflation data, with Micron's Wednesday earnings expected to test the broader technology rally

Market Summary: Dow Rises on Diplomatic Progress; Inflation Data Awaited

Market Performance:

US stocks opened mixed on Monday, with the Dow Jones Industrial Average climbing 204 points while the Nasdaq Composite declined 0.27% and the S&P 500 edged up 0.11%.

Key Developments:

US-Iran Negotiations: Progress in US-Iran talks in Switzerland bolstered investor sentiment. Mediators reported "encouraging progress" with both sides agreeing to a 60-day roadmap toward a final deal, though tensions remain over Lebanon and the Strait of Hormuz.

Oil Market Reaction: Crude prices reversed sharply on diplomatic optimism. Brent crude fell 1.6% to $79.30 per barrel, while West Texas Intermediate dropped 0.8% to $76 after initially rising 3% during Asian trading hours.

Sector Focus: Technology stocks led gains, with memory chip manufacturers including Micron, SanDisk, and Intel advancing. Micron (up ~300% year-to-date) reports quarterly earnings Wednesday, serving as a crucial test for the tech rally.

Inflation Watch: Markets await Thursday's PCE (Personal Consumption Expenditures) price index release—the Federal Reserve's preferred inflation gauge. Core PCE is expected to increase from April levels.

Monetary Policy Outlook: Following last week's hawkish Fed meeting, markets have priced in potential rate increases as early as September or October. The two-year Treasury yield climbed to 4.230%, its highest since early 2025. Investors will monitor comments from Fed officials John Williams and Austan Goolsbee for policy direction.

Other Movers: Apogee Therapeutics saw notable movement, while SpaceX-related developments drew attention.

The combination of geopolitical progress and upcoming inflation data creates a critical week for determining the Fed's next moves on interest rates.