The blue-chip Dow Jones Industrial Average surged nearly 500 points.
U.S. stocks surged at the start of the trading week, rebounding from Friday’s selloff sparked by geopolitical tensions following Israel’s large-scale attack on Iran.
“The declines weren’t as bad as feared,” Tom Essaye, the president and co-founder of Sevens Research Report, said in a note emailed to The Epoch Times on Monday. “The market views the chances of the conflict spreading as relatively low.”
The blue-chip Dow Jones Industrial Average surged nearly 500 points, or 1.2 percent, during the June 16 trading session. The broader S&P 500 rose more than 69 points, or 1.16 percent. The tech-heavy Nasdaq Composite Index advanced about 290 points, or 1.5 percent.
Asian stocks also bounced back. The Hang Seng Index climbed 0.7 percent and the Shanghai Composite Index rose 0.35 percent. The Nikkei picked up 1.26 percent.
Israel and Iran have exchanged missile attacks since Friday, and the situation in the Middle East is expected to be a major topic at the G7 Summit in Canada.
The market rebound suggests that traders anticipate the conflict will be contained rather than expanded to the broader region.
West Texas Intermediate (WTI) crude oil futures plummeted $3.03, or 4.15 percent, to $69.95 a barrel on the New York Mercantile Exchange. The U.S. benchmark is now flat on the year.
Brent, the international benchmark for oil prices, declined $2.94, or 3.96 percent, to $71.29 per barrel on London’s ICE Futures exchange. Brent is down nearly 5 percent year-to-date.
Since Tehran’s military capabilities have been degraded and the country is not a significant contributor to global oil markets, the conflict is likely to be limited, Essaye said.
“If either of those assumptions change (that a broader war will occur or oil prices will sustainably rise), then the market will care about this conflict (and it will be negative for stocks),” he added.
Iran produces approximately 3.3 million barrels per day.
Natural gas prices extended their gains, climbing more than 1.5 percent to about $3.64 per million British thermal units.
By Andrew Moran
