Wall Street: Oil drop and strong earnings drive broad market rebound

The U.S. stock market reversed its downward trend on Monday, wiping out most of the losses sustained during the previous week. The S&P 500 index rose by 2.3 percent, marking its second consecutive day of gains. This rally followed a sharp sell-off driven by concerns that recent Democratic election victories could hinder the construction of artificial intelligence data centers. The index is now positioned just 3.4 percent below the record high established last month.

Brent crude oil prices played a central role in the market recovery. The cost of a barrel dropped by 5.8 percent to reach $92.57. This price action follows a decline from levels above $112 at the start of the month. Investors reacted to remarks made by President Donald Trump over the weekend. He stated on CNN that a resumption of strikes against Iran is highly unlikely if negotiations show progress. Secretary of State Marco Rubio offered a contrasting view on Sunday, describing some Iranian demands for an end to the conflict as outrageous and ridiculous.

Corporate earnings reports also provided momentum for the broader market. Constellation Energy shares climbed 10.5 percent after the power company released figures showing both profit and revenue for the summer quarter exceeded analyst projections. The company has recently announced deals to supply electricity to data centers owned by major technology firms. This performance came amid increased scrutiny of the data center industry following state-level election results. Voters have blamed these facilities for rising power bills, prompting fears that new governments might impose regulatory restrictions.

Other technology stocks linked to the AI build-out saw similar gains. Advanced Micro Devices rose 13.3 percent, recovering from an 11 percent loss recorded the previous week. CoreWeave shares climbed 5.6 percent after falling 15.4 percent in the prior session. These gains occurred despite a drop in Nvidia, the company often viewed as the face of the AI boom. Nvidia stock fell 4.3 percent on Monday.

The decline in Nvidia shares followed the company's announcement that it is investigating its chief executive, Jensen Huang. Huang acknowledged an intimate relationship with a business executive who, according to The New York Times, was gathering information for China based on U.S. intelligence findings. Nvidia's board of directors stated it has no reason to believe national security or corporate secrets were compromised. The board said it will examine all available information as part of the inquiry. Guo Jiakun, a spokesperson for China's Ministry of Foreign Affairs, called the allegations nothing but smears against China.

Key market indicators closed higher across the board. The S&P 500 finished at 7,549.94, a gain of 173.08 points. The Dow Jones Industrial Average increased by 1,104.02 points to close at 52,389.75. The Nasdaq composite rose 673.71 points to reach 25,253.14. International markets mirrored the positive sentiment, with France's CAC 40 up 1.2 percent and Japan's Nikkei 225 jumping 2.3 percent. South Korea's Kospi index lagged behind, falling 0.8 percent.

In the bond market, yields remained stable after the volatility seen last week. The yield on the 10-year Treasury note inched up to 4.87 percent from 4.86 percent late Friday. This level is well below the peak above 5.30 percent recorded last month, which marked the highest level in two decades. The recent pullback in Treasury yields has contributed to lower rates for mortgages and other loans, providing a supportive environment for stock prices and other investments.