U.S. equities opened modestly higher on Monday, buoyed by signs of diplomatic progress between the United States and Iran and anticipation of a critical inflation report that may shape the Federal Reserve's monetary policy trajectory.
The Dow Jones Industrial Average climbed 204 points, while the S&P 500 edged up 0.11%. The Nasdaq Composite slipped 0.27%, reflecting mixed sentiment across sectors.
US-Iran Talks Yield Framework Agreement
Officials from the U.S. and Iran concluded the first round of negotiations in Switzerland on Monday, with mediators from Qatar and Pakistan describing the discussions as making "encouraging progress." The two sides agreed on a roadmap aimed at reaching a final deal within 60 days, though lingering tensions over Lebanon and the Strait of Hormuz remain unresolved.
The diplomatic breakthrough weighed on oil prices, with Brent crude futures falling 1.6% to $79.30 a barrel after initially rising in Asian trading. U.S. West Texas Intermediate crude reversed earlier gains of as much as 3%, settling about 0.8% lower at $76. The easing of supply disruption fears contributed to the pullback in energy markets.
Chip Stocks Lead Technology Gains
Semiconductor shares provided a lift to broader market sentiment. Memory chipmakers advanced, with Micron Technology and Sandisk each gaining approximately 5%. Intel rose 4.8%. Investors are closely watching Micron's quarterly results, due after the close on Wednesday, which could serve as a bellwether for the technology rally. Micron shares have surged nearly 300% year-to-date.
In other notable moves, SpaceX shares fell 6% to $173, heading for a third consecutive decline following its strong market debut. Separately, Apogee Therapeutics soared 46% after AbbVie announced plans to acquire the biotech firm for $10.9 billion in cash. AbbVie shares rose 4.3% on the news.
For more on the tech sector's recent volatility, see our coverage of the AI stock rout and Qualcomm's potential $4B AI deal.
Inflation Data and Fed Policy in Spotlight
Market participants are now turning their attention to Thursday's release of the personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge. Economists expect core PCE, which excludes volatile food and energy prices, to rise from April levels.
Following the Fed's hawkish stance at its last meeting, markets have brought forward expectations for another interest rate increase to as early as September, according to LSEG data. Some investors are pricing in a potential move by October. The yield on the two-year Treasury note, sensitive to near-term rate expectations, climbed to 4.230%, its highest level since early 2025.
Investors will also monitor comments from Federal Reserve officials, including New York Fed President John Williams and Chicago Fed President Austan Goolsbee, for further clues on the path of monetary policy. For context on recent inflation trends, see our analysis of U.S. inflation hitting 4.2% in May.
This article is for informational purposes only and does not constitute financial advice.
