NEW YORK / RankWire.AI / – The US stock market experienced a strong rally on Monday, driven by gains in major technology stocks and a significant drop in oil prices. The Dow Jones Industrial Average surged by 693.38 points, or 1.32%, closing at a record 53,178.41. The S&P 500 increased by 1.48% to 7,600.50, just shy of its all-time high. Meanwhile, the Nasdaq Composite climbed 2.13% to 25,913.90, leading the main indexes. The market kicked off August with widespread gains across both large and small-cap stocks.
Technology and communication services shares largely contributed to the gains. Meta Platforms and Alphabet played a key role in lifting the S&P 500 communication services sector by 4.3%, marking the strongest performance among 11 sectors. Amazon jumped 4.6%, reaching a market value exceeding $3 trillion for the first time following its quarterly earnings. An ETF tracking seven leading tech giants also gained nearly 4%, highlighting robust demand for the top growth stocks.
The decline in crude oil prices also supported the market rally. Brent crude settled 4.7% lower at $83.77 a barrel after President Donald Trump announced the US would delay new strikes against Iran. Trump additionally mentioned that negotiations would address reopening the Strait of Hormuz, although Iran disputed that any talks had been scheduled. This drop in oil prices helped ease immediate inflation concerns and caused Treasury yields to decline during the session. Energy stocks, however, fell 1.2%, making the sector the weakest performer of the day.
Drop in oil prices alleviates market tensions
The yield on the benchmark 10-year Treasury note decreased to approximately 4.68%, down from late Friday levels. This decline in yields lowered borrowing costs for growth-oriented companies, which often see their valuations react strongly to interest rate fluctuations. The Federal Reserve remains a focal point after recent inflation worries and rising energy prices. New York Federal Reserve President John Williams noted that inflationary pressures should ease gradually. Bond prices increased as yields fell, while investors awaited further labor market data.
The upward movement extended beyond the tech giants, with the Russell 2000 index of smaller companies climbing 1.7% to 2,981.91. Advancing stocks outnumbered decliners by 2.62 to 1 on the New York Stock Exchange and 3.01 to 1 on the Nasdaq. Trading volume reached 19.36 billion shares, above the 20-day average of 17.66 billion. The S&P 500 registered 15 new 52-week highs and one new low.
Strong earnings reports bolster the rally
Corporate earnings provided an additional boost to the market. Of the 304 S&P 500 companies that reported results through Friday, quarterly earnings growth was 29.3%. Approximately 85.2% of these companies surpassed analyst expectations, according to data provider LSEG. SpaceX rose 5.6% ahead of its first quarterly report as a publicly traded firm. Conversely, Marriott International declined 7% after issuing a third-quarter profit forecast below expectations.
The Dow’s closing at a record level capped a robust start to August, following a challenging July for parts of the market. Concerns surrounding artificial intelligence spending, interest rate hikes, and tensions with Iran had previously weighed on technology stocks. Monday’s gains brought the S&P 500 within 0.1% of its all-time high and extended Nasdaq’s upward momentum. For 2026, the Dow has gained 10.6%, the S&P 500 has increased 11%, and the Nasdaq has risen 11.5%.