S&P 500 Rebounds as Brent Crude Falls 7.5% to $104.92

The U.S. stock market recovered ground on Monday following a sharp sell-off in the technology sector during the previous week.

The S&P 500 index increased by 0.3%, narrowing the gap to its all-time high to 2.8%. The Dow Jones Industrial Average gained 494 points, or 1%, by 12:50 p.m. Eastern time, while the Nasdaq composite rose 0.4%. This marked the first positive session after the S&P 500 recorded three consecutive weeks of losses.

Oil prices provided a major boost to equities. Brent crude, the international benchmark, dropped 7.5% to settle at $104.92 per barrel. The price of the most actively traded Brent contract has fluctuated between approximately $70 and $120 since the war with Iran began. Market participants remain uncertain about when the global oil industry will return to normal operations. The decline in fuel costs directly benefited airlines and cruise lines, which face substantial energy expenses. United Airlines shares rose 5%, Southwest Airlines climbed 3.1%, and Carnival increased 4%.

Technology stocks showed signs of stabilization after months of volatility. Investors have expressed concern that massive capital expenditures on artificial intelligence data centers may not generate sufficient returns. Recent earnings from major tech firms revealed that AI investments are consuming cash while search revenue growth slows. Alphabet, the parent company of Google, saw its free cash flow decrease in the latest quarter. The company also reported slower growth in its search business, raising concerns that AI is impacting its primary revenue source. Despite a historic drop of more than 12% on Thursday, Alphabet shares rose 1% on Monday. Nvidia, another key AI player, gained 0.5% following a 4.2% decline on Friday.

Non-tech companies also contributed to the market's advance. Marriott International shares rallied 3.6% after the company reported stronger performance across its global hotel portfolio. CEO Anthony Capuano stated that trends improved meaningfully from the spring, even in the Middle East where the war has affected business. Idexx Laboratories, a supplier of diagnostic equipment to veterinarians, saw its stock jump 20.5%. The company exceeded analyst expectations for profit and revenue in the latest quarter and raised its full-year 2026 forecasts for both metrics.

Economic data released on Monday indicated that U.S. manufacturing growth outperformed economist predictions in the previous month. A survey by the Institute for Supply Management also showed that price increases were slowing, a positive sign for inflation. This data suggests the economy continues to expand despite high interest rates.

Marvell Technology fell 10.1% after announcing it would acquire Lumentum, a maker of lasers for AI and cloud infrastructure. The deal values the transaction at roughly $115 billion, with Marvell offering 4.5 of its shares for each Lumentum share. Lumentum shares dropped 15.5% in the announcement. Apple stock declined 1.8% as investors awaited its earnings report, which is scheduled for release after the market closes.

Global markets also moved higher. European indexes rose, while Asian markets experienced larger swings. South Korea’s Kospi index jumped 2.2% on strength in its dominant tech sector. In China, the Shanghai index rose 1.1% and the Hang Seng index in Hong Kong gained 0.4%. The People’s Bank of China stated that approximately 100 billion yuan, or $15 billion, would be deployed under a new program to support the market.