While a return of military strikes between Iran and the United States boosted crude prices, major US indices spent the entire day in positive territory.
The Dow climbed 0.6 percent to a fresh record, while the tech-focused Nasdaq jumped more than two percent.
“So far, the start of this short week is really about rotation back into tech, which is leading the gains, both the software and semiconductor space, both participating,” said Angelo Kourkafas of Edward Jones.
Last week, semiconductor shares were under pressure on worries that soaring valuations have gotten out of control. But that retreat set the stage for renewed buying on Monday, analysts said.
AI leader Nvidia tacked on 1.3 percent, while other chip companies such as AMD, Broadcom and Intel won more than two percent.
“Technology was the worst performing sector over the course of the last two weeks,” said Art Hogan of B Riley Wealth Management. “So you’ll likely see some bargain hunting in those spaces, and I think that’s helping move the broad market a little bit higher.”
Oil prices, which last week fell to pre-war levels, rose modestly on Monday.
While Washington said it had agreed with Iran to halt the attacks and continue talks, the strikes again disrupted shipping through the vital Strait of Hormuz over the weekend.
“The impact on oil prices remains relatively contained,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Europe’s main markets ended the day lower.
On the economic front, investors are looking ahead to the release of US jobs data this week, which could have a bearing on the US Federal Reserve’s monetary policy plans.
The bank has taken a more hawkish turn amid concerns over surging inflation caused by the Iran war.
That has had an impact on the US dollar and its main rivals, including the yen, which fell to 161.96 to the dollar, a level last seen in December 1986.
“Thursday’s US payrolls report looms as the week’s defining event,” said David Scutt, market analyst at Forex.com. “Unless Kevin Warsh or Japanese authorities deliver a genuine surprise beforehand, the labour market report is likely to determine whether markets continue to build on the hawkish Fed repricing seen in recent months, or start to unwind it.”
Eyes will also be on the European Central Bank’s annual forum held in Portugal this week, which the Federal Reserve’s Kevin Warsh is expected to attend.
The Dow rose 0.6 percent, to 52,182, the S&P 500 rose 1.2 percent, to 7,440, while the Nasdaq rose 2.1 percent, to 25,820. (AFP)
