New york: The New York Stock Exchange closed the first trading day of the week with gains on increased optimism of a ceasefire in the Iran war.
According to Anadolu Agency, the Dow added 0.36%, or 165.21 points, to close at 46,669.88. The Nasdaq composite rose 0.54%, or 117.16 points, to 21,996.34, while the S and P 500 climbed 0.44%, or 29.14 points, to 6,611.83. The Volatility Index (VIX), often referred to as the 'fear index,' rose 1.26% to 24.17.
Stocks saw gains after Axios reported that the US, Iran, and several regional mediators were negotiating a possible 45-day ceasefire that might pave the way for a lasting end to the war. However, prospects for a limited agreement before Tuesday's deadline appeared low. The proposed 45-day truce was only one of several options under discussion.
US President Donald Trump reiterated on Monday that the US would destroy Iran's power infrastructure and bridges if Tehran fails to reopen the Strait of Hormuz by 8 pm ET on Tuesday (1200GMT Wednesday), repeating a warning he first issued on Sunday. Trump also expressed his intention to seize Iran's oil, stating: 'Because it's there for the taking. There's not a thing they can do about it. Unfortunately, the American people would like to see us come home.'
Oil prices experienced volatility early in the week. US West Texas Intermediate (WTI) futures were up 1.3% at more than $112.9 a barrel, while international benchmark Brent crude futures rose 0.6% to above $109.6 a barrel.
Meanwhile, White House National Economic Council Director Kevin Hassett mentioned on Monday that the US Federal Reserve might still have room to lower interest rates once the energy-driven supply shock fades. He argued that productivity gains from artificial intelligence and capital spending should help contain inflation. Speaking to CNBC, Hassett noted that higher productivity was exerting 'downward pressure on inflation,' which, in his view, should ease pressure on the Fed and allow for lower borrowing costs. He also anticipated this could happen when Kevin Warsh takes over as Fed chair, expected next month if confirmed by the US Senate.