Stocks were volatile on Monday, but ultimately climbed higher after the United States joined Israel's war against Iran over the weekend, striking three nuclear sites on Saturday. Wall Street ultimately turned higher after Iran targeted U.S. military bases in Qatar, with investors seeing this response more restrained that anticipated.
The Dow Jones Industrial Average (NYSE: DIA) jumped nearly 375 points, while the S&P 500 Index (NYSE: SPY) and Nasdaq Composite (NASDAQ: QQQ) added about 1% each.
The United States launched an attack on Iranian nuclear facilities in Fordo, Isfahan and Natanz on Saturday in a move widely unexpected as President Donald Trump said on Friday he would decide whether or not to join Israel over the next two weeks.
Wall Street has been keeping an eye on energy prices on Monday, after Trump posted earlier on his social media platfrom Truth Social that oil producers should keep prices low, signaling that raising oil prices in response to the growing conflict would be playing "right into the hands of the enemy."
In a seperate post, Trump called for the U.S. to increase its oil production, stating: "To The Department of Energy: Drill, BABY, DRILL!!! And I mean NOW!!!."
Later on Monday, Iran responded to the attack with its own strike on U.S. air bases in Qatar, sending oil futures lower as market participants weighed the longer terms of the conflict. International benchmark Brent Crude futures fell over 7% to trade below $72 a barrel, while West Texas Intermediate futures also dropped over 7% to price below $68 a barrel.
Investors were also encouraged after Federal Reserve Governor Michelle Bowman became the second policymaker to support beginning interest rates cuts as soon as July as long as prices remain stable. Bowman's stance is shared by fellow Governor Christopher Waller, and represents a shift from her previous views to hold rates higher-for-longer.
"Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market," Bowman said in remarks for a speech in Prague. "In the meantime, I will continue to carefully monitor economic conditions as the [Trump] Administration's policies, the economy, and financial markets continue to evolve."
Consumers also don't seem to be phased by current price pressures, according to JPMorgan analyst Richard Shane, as client data from the bank's Chase consumer banking unit shows spending increased month-to-month in June.
"Total spending growth increased to -2.4% as of June 13, slightly above the May figure of -2.3%. However, the June MTD growth rate has decelerated throughout the month as more data has become available and the [year-over-year] comparison has become less distorted," Shane wrote in a note.
Shane also marked a generational divide in the spending data, with younger Gen Z and Millennial consumers spending gains rising by 5.2% so far this month, while older Gen X and Baby Boomer spending remains relatively flat.
On the corporate side, Tesla (NASDAQ: TSLA) released its Model Y robotaxi on Sunday in Austin, Texas, opening the service only to invited riders initially. CEO Elon Musk said in a post on his social network X that customers will be charged a flat fee of $4.20 per ride.
"Super congratulations to the @Tesla_AI software & chip design teams on a successful @Robotaxi launch!! Culmination of a decade of hard work. Both the AI chip and software teams were built from scratch within Tesla," the billionaire wrote in the post.
Shares of Novo Nordisk (NYSE: NVO) and Hims & Hers (NYSE: HIMS) dropped on Monday after the Ozempic maker announced it is ending its collaboration with the telehealth company due to the latter's sales and promotions of cheaper versions of its obesity injectable Wegovy. The company said Hims & Hers has "failed to adhere to the law which prohibits mass sales of compounded drugs" and accused the telehealth provider of "deceptive" marketing.
Novo Nordisk had offered direct-to-consumer sale of Wegovy through several telehealth companies back in April to expand access to the drug after the Food and Drug Administration said the U.S. is no longer seeing a shortage of semaglutide.
Looking ahead, market participants will monitor the latest developments in the Middle East on Tuesday before turning their attention towards Fed Chair Jerome Powell's testimony to the House Financial Service Committee.