Dow Jumps as Oil Drops After Iran Counterattack

Wall Street's main indexes rose Monday after oil prices fell 4% to $74.09, following a restrained response by Iran to U.S. attacks on its nuclear facilities over the weekend.

Earlier in the day, oil briefly touched a five-month high of $81 a barrel, as oil and gas transit continued on tankers from the Middle East.

At 2:30 p.m., the S&P 500 was up 40.13 points, or 0.67%, the Dow gained 287.75 points, or 0.68%, and the Nasdaq was up 155.15 points, or 0.80%.

Also contributing to the rise were dovish comments from the Federal Reserve's Michelle Bowman as well as gains in Tesla outweighed worries of potential oil supply bottlenecks following U.S. airstrikes on nuclear facilities in Iran.

Fed Vice Chair for Supervision Michelle Bowman, recently tapped by Trump as the central bank's top bank overseer, said the time to cut interest rates could be fast approaching.

She noted growing concerns about the job market and said she was less worried tariffs would lead to inflation.

Tesla's shares rose 9.7% after it deployed a small group of self-driving taxis picking up paying passengers on Sunday in Austin, Texas.

Tehran has repeatedly threatened to retaliate against the U.S. attacks, but is yet to do so in a meaningful way.

Equity markets have been pressured in recent days as the Israel-Iran attacks raised concerns about a wider conflict in the Middle East, disrupting oil prices and raising concerns about a resurgence in inflationary pressures.

The benchmark S&P 500 (.SPX), opens new tab index was about 2.7% below its record level.

"I think the market is certainly in a holding pattern, waiting to see the level of Iran's response to the U.S. weekend attacks," said Ross Mayfield, investment strategist at Baird.

"There's a sense that investors are conditioned not to think that geopolitical conflicts in the Middle East will have a long-term impact on the market."

Nine of the 11 major S&P 500 sub-sectors rose by 11:56 a.m. EST. Energy stocks (.SPNY), opens new tab fell 0.4%, while consumer discretionary (.SPLRCD), opens new tab led gains and was up nearly 2%.

The focus this week will be on U.S. core PCE data and the final GDP reading, as well as Fed Chair Jerome Powell's two-day semiannual testimony before Congress.

The central bank held interest rates steady in its June monetary policy meeting, but flagged inflationary risks due to higher trade duties.

Data on Monday showed U.S. business activity slowed marginally in June, while prices increased further amid President Donald Trump's tariffs, indicating that inflation might rise in the second half of 2025.

Among other movers, drugmaker Eli Lilly (LLY.N), opens new tab edged up 0.7%. Its rival Novo Nordisk (NOVOb.CO), opens new tab fell 5.3% after detailed trial data on its experimental obesity drug CagriSema failed to impress investors.

Northern Trust (NTRS.O), opens new tab surged 6.9% after a Wall Street Journal report said Bank of New York Mellon (BK.N), opens new tab approached the asset and wealth manager for a potential merger.

AI-server-maker Super Micro Computer (SMCI.O), opens new tab dropped 6% after announcing a private offering of $2 billion five-year convertible bonds.

Advancing issues outnumbered decliners by a 1.51-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and four new lows, while the Nasdaq Composite recorded 60 new highs and 77 new lows.