U.S. stocks closed higher Monday as investors looked past another surge in oil prices tied to the Iran war and instead focused on signs that the global economy remains resilient and that U.S.-China tensions could ease ahead of the summit between President Donald Trump and Chinese President Xi Jinping.
The Dow Jones Industrial Average rose 95.18 points, or 0.19%, to 49,704.3. The S&P 500 gained 13.94 points, or 0.19%, to 7,412.87, while the Nasdaq Composite added 27.05 points, or 0.10%, to 26,274.1. Crude oil for June delivery climbed $2.67, or 2.80%, to $98.09 a barrel, while the VIX volatility index jumped 7.39% to 18.46.
Stocks traded unevenly through much of the session as traders weighed the inflationary implications of rising energy prices against continued momentum in artificial intelligence-linked shares and improving sentiment around global trade. Oil briefly pushed toward $100 a barrel after President Trump rejected Iran’s latest ceasefire proposal, intensifying concerns that disruptions around the Strait of Hormuz could persist. Speaking to reporters in the Oval Office about the Iran war ceasefire Trump said, “I would say the ceasefire is on massive life support, where the doctor walks in and says, ‘Sir, your loved one has approximately a 1% chance of living.’”
Still, investors appeared increasingly willing to treat the Iran war as an economic shock the global economy could absorb rather than a catalyst for an immediate recession. Goldman Sachs described the current environment as “bending, not breaking,” arguing that global growth has remained more durable than many feared despite elevated energy prices and ongoing supply disruptions tied to the conflict.
That helped fuel buying in large-cap technology and semiconductor shares, particularly after reports that preparations are advancing for a Trump-Xi summit that could address tariffs, Taiwan, artificial intelligence policy, and rare earth supply chains. AInvest reported that investors increasingly view the potential meeting as critical to stabilizing the global chip trade and sustaining the AI spending boom that has powered markets to repeated record highs this year.
The market also appeared supported by expectations that upcoming inflation data may show the broader U.S. economy remains relatively stable despite higher gasoline and shipping costs linked to the war. Investors are now closely watching Tuesday's consumer price index report for clues on whether the Federal Reserve may keep interest rates elevated longer as oil prices rise.
Even with Monday’s gains, caution remained visible beneath the surface. Higher oil prices continued lifting energy shares while pressuring transportation and consumer-sensitive sectors, reflecting growing concern that a prolonged Iran war could eventually feed into broader inflation and corporate margin pressures.
For now, however, Wall Street’s dominant bet remains that AI-driven earnings growth, resilient consumer spending, and hopes for improving U.S.-China relations can continue to offset the economic drag from the Iran war and the sharp rise in global energy prices.