U.S. stock markets experienced a notable rebound on the first trading day of the week, as all three major indexes closed higher. Factors contributing to the positive market sentiment included a decrease in crude oil prices, which helped alleviate some inflationary pressures, alongside a resurgence in technology stocks particularly related to artificial intelligence (AI).
The Dow Jones Industrial Average (DJI) rose by 0.8%, climbing 387.94 points to finish at 46,946.41. At one point during the day, the index surged by nearly 230 points. Among its 30 components, 25 stocks gained ground while only four saw losses, and one remained unchanged.
The tech-heavy Nasdaq Composite saw an impressive uptick, closing at 22,374.18, a gain of 1.2% or 268.82 points, bolstered by strong performances from major tech companies. At its peak, the index was up over 416 points in intraday trading. The S&P 500 also ended positively, with a 1% increase to close at 6,699.38. While five sectors of the S&P 500 came in positive, six others posted losses, with the Utilities Select Sector SPDR (XLU) gaining 1% and the Materials Select Sector SPDR (XLB) declining by the same percentage.
Investor confidence was buoyed by a substantial drop in the CBOE Volatility Index (VIX), which fell by 13.5% to 23.51. Trading volume totaled 17.4 billion shares, below the recent average of 19.9 billion. The S&P 500 recorded 16 new 52-week highs against 10 new lows, while the Nasdaq marked 51 new highs and 138 new lows.
Despite the positive market performance, geopolitical tensions in the Middle East remained a concern, particularly as Iran continued its retaliation against the U.S.-Israel actions, impacting crude oil supply lines through the crucial Strait of Hormuz. Nonetheless, crude oil prices saw a notable decline. The International Energy Agency (IEA) announced an unprecedented release of 400 million barrels of crude oil to stabilize the global oil market, further aided by increased production from Saudi Arabia.
U.S. benchmark West Texas Intermediate (WTI) futures settled down 5.3% at $93.50 per barrel, while global Brent futures decreased 2.8% to end at $100.21 per barrel.
In technology, NVIDIA Corp. delivered optimistic projections during its annual developer conference, with CEO Jensen Huang forecasting total purchase orders for its upcoming chip platforms to reach $1 trillion by 2027, significantly upward from a previous estimate of $500 billion for 2025. Major automakers such as Nissan, BYD, and Hyundai are reportedly engaged in developing level 4 autonomous vehicles using NVIDIA’s technology.
Additionally, Meta Platforms Inc. cemented a substantial $27 billion agreement with Nebius Group N.V. for AI infrastructure support, further positioning itself in the competitive cloud computing landscape. Meta committed to an initial investment of $12 billion for dedicated capacity, with potential additional purchases reaching $15 billion over five years.
As a result of these developments, stock prices of Nebius, Meta, and NVIDIA experienced solid gains, rising by 15%, 2.3%, and 1.7%, respectively. NVIDIA holds a Zacks Rank #2 (Buy), indicating its favorable outlook in the market.
On the economic front, industrial production rose by 0.2% in February, surpassing Zacks Consensus estimates, which had projected no change. Manufacturing output also edged up, influenced by a 0.8% growth in mining, although utility production saw a decline. Capacity utilization nudged up to 76.3%, just shy of the consensus estimate of 76.4%. Meanwhile, the NY Empire State Index for manufacturing unexpectedly fell to -0.2, showing a sharper decline than the anticipated 4.1.
Stock analysts continue to keep a close watch on these economic developments as investors assess the landscape for potential opportunities in the coming weeks.
