Highlights
Stocks recovered from early losses to end narrowly mixed but mostly better Monday as many traders bought the opening dip triggered by US-Israeli attacks on Iran. The Dow Jones industrial average eased 0.2 percent, the broader S&P 500 was flat and the Nasdaq firmed 0.4 percent. US Treasury yields and the dollar rose while oil prices rallied.
Markets reacted initially with a significant risk-off move on news of US-Israeli strikes against Iran. Worry focused on rising energy prices with disruption in flow of energy through the Persian Gulf and Iranian strikes against Gulf oil facilities. Stocks rebounded through most of the day as investors appeared to see the impact of the war as relatively limited and short-lived.
Bond markets reacted to the war news by pushing yields higher as inflation worries linked to higher fuel prices outweighed the flight to safe assets that ordinarily would support bond prices and push down yields.
Energy stocks were among the day's best performers on rising oil prices. Big technology had a good day, paced by Nvidia and other AI-linked shares. Airlines and travel stocks lagged amid worries about disruption to travel and higher jet fuel prices.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.