US: Stocks gain as Middle East clash seen as contained so far
[NEW YORK] Wall Street stocks rose on Monday on hopes the Israel-Iran conflict will not spiral further, as markets began to look ahead to a Federal Reserve decision later in the week.
Iran’s state broadcaster was briefly knocked off air by an Israeli strike after a barrage of Iranian missiles killed 11 people in Israel on the fourth day of an escalating air war.
But US stocks spent the entire session in positive territory as oil prices retreated in the absence of a direct hit to oil infrastructure, a sign analysts took as indicating that worse scenarios had not played out.
The Dow Jones Industrial Average finished up 0.8 per cent at 42,515.09.
The broad-based S&P 500 climbed 0.9 per cent to 6,033.11, while the tech-rich Nasdaq Composite Index jumped 1.5 per cent to 19,701.21.
“The primary force today is just the sense that the conflict between Israel and Iran is relatively contained so far,” said Briefing.com analyst Patrick O’Hare.
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After decades of enmity and a prolonged shadow war, Israel on Friday launched a surprise aerial campaign against targets across Iran, saying they aimed to prevent its arch-foe from acquiring atomic weapons – a charge Tehran denies.
While the conflict brews on, there has been no direct hit on the Straits of Hormuz, a key shipping lane, analysts said.
“It hasn’t really gotten worse than the bombing and it’s not boiling over into other countries or other markets, like shipping,” said Jack Ablin of Cresset Capital Management.
A majority of the S&P 500’s 11 sectors advanced.
Semiconductor shares were among the strongest sectors, with AMD 8.7 per cent winning, Nvidia 1.9 per cent and Micron Technology 3.7 per cent.
United States Steel jumped 5.1 per cent in the first session since President Donald Trump signed an executive order approving a “partnership” between the Pittsburgh-based company and Nippon Steel, apparently clearing the way for a transaction partially revised from an original plan for the Japanese firm to acquire the old US company.
Besides the Middle East conflict, markets are watching for Wednesday’s Fed decision and other US economic news, including May retail sales. AFP
