S&P 500 rebounds 1.9% as oil cools and AI stocks stabilize

The S&P 500 surged 1.9% on Monday, reclaiming most of the ground lost in the previous week's sell-off. The recovery tracked a sharp drop in oil prices and strong earnings from major U.S. companies. This occurred even as Nvidia, a key driver of recent market performance, fell 6.4%.

The Dow Jones Industrial Average rose 900 points, or 1.8%, by 11:30 a.m. Eastern time. The Nasdaq composite climbed 2.2%. These gains marked the second consecutive day of strength for the S&P 500. The index now sits 3.8% below its all-time high set last month.

Energy costs provided a key tailwind for the broader market. Brent crude prices fell 4.3% to $94.11 per barrel. This follows a decline from levels above $112 at the start of the month. President Donald Trump told CNN over the weekend that renewed strikes on Iran are “highly unlikely” if negotiations show progress. Secretary of State Marco Rubio countered on Sunday that Iranian demands to end the war have sometimes been “outrageous and ridiculous.”

Companies with high fuel expenses led the rally. United Airlines shares jumped 6.6%, while Carnival stock rose 3.6%. Investors also responded to strong quarterly results from Constellation Energy, which climbed 8% after reporting profit and revenue that exceeded analyst estimates for the summer quarter. The power company has recently secured contracts to supply electricity to data centers for major technology firms.

Other stocks tied to the artificial intelligence buildout also recovered. Advanced Micro Devices shares rose 10.7%, offsetting an 11% loss from the prior week. CoreWeave gained 5.2% after dropping 15.4% previously. These gains came despite concerns that Democratic victories in last week's midterm elections could lead to regulatory scrutiny of data centers and higher utility bills.

Nvidia's decline was driven by news that the company is investigating CEO Jensen Huang. Huang acknowledged an intimate relationship with a business executive whom U.S. intelligence agencies determined was gathering information for China. The company's board stated it has “no reason to believe” national security or Nvidia secrets were compromised. It said the inquiry would review all available information.

Guo Jiakun, spokesperson for China's Ministry of Foreign Affairs, described the allegations as “nothing but smears against China.” In international markets, the Nikkei 225 in Japan jumped 2.3%, and France's CAC 40 rose 1.2%. The Shanghai index in China gained 0.3%, while the Hong Kong index dipped 0.1%.

In the bond market, the yield on the 10-year Treasury held at 4.87%, up slightly from 4.86% late Friday. This level remains well below the peak above 5.30% reached last month. That earlier high was the highest in two decades, driven by worries over inflation and U.S. government debt. The recent pullback in yields has helped lower rates for mortgages and other loans.