Wall Street Rises as Crude Oil Prices Fall and Small Caps Surge

Investor sentiment became more positive toward risk assets at the start of the week, largely due to declining oil prices. This drop followed Israel's recent decision to avoid targeting Iranian crude facilities amidst weekend attacks, which calmed fears of an intensifying conflict in the Middle East and its potential impact on the global economy.

The S&P 500 saw a modest increase of 0.3%, while the technology-focused Nasdaq 100 matched this gain. The Dow Jones Industrial Average performed slightly better, rising by 0.6%.

In a noteworthy turn, small-cap stocks displayed even stronger performance. The Russell 2000 surged by 1.5%, marking a rebound after experiencing losses in six out of the past seven sessions.

Notably, West Texas Intermediate (WTI) crude oil prices, monitored by the United States Oil Fund (USO), dropped more than 5% during midday trading in New York. This decline was set to become the largest single-day drop since July 2022. In addition, natural gas prices fell sharply, with Henry Hub prices decreasing by over 9%, set for their steepest loss in one day since mid-January.

Meanwhile, U.S. energy stocks faced challenges, with the Energy Select Sector SPDR Fund (XLE) being the only sector to record a loss on Monday.

Despite the significant fall in energy prices, Treasury yields continued their upward trend, which could potentially dampen the bullish sentiment in the stock market. Investors remain wary of possible further deterioration in U.S. fiscal policy, especially with the upcoming election season. On that note, the yield on 10-year Treasury bonds increased by 5 basis points to settle at 4.29%, nearing its highest close since July 11.

Gold prices remained steady around $2,745 per ounce, showing no significant change since last Tuesday’s close.

In the world of cryptocurrency, sentiment was notably bullish. Bitcoin (BTC/USD) rose by 1.4%, surpassing $68,000 and reaching its highest point in a week. Additionally, Dogecoin (DOGE/USD) saw an increase of 4.5% for its third consecutive day of gains, aiming for the highest levels seen since June.

Performance Overview of Major U.S. Indices and ETFs

Major Indices	Price	1-day % change
Russell 2000	2,242.10	1.5%
Dow Jones	42,381.18	0.6%
S&P 500	5,828.13	0.3%
Nasdaq 100	20,409.47	0.3%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (SPY) experienced an increase of 0.54%, reaching $581.22.
• The SPDR Dow Jones Industrial Average (DIA) climbed by 0.7%, settling at $424.02.
• Additionally, the tech-focused Invesco QQQ Trust Series (QQQ) edged up by 0.2% to maintain a value of $496.42.
• The iShares Russell 2000 ETF (IWM) increased by 1.7%, currently at $222.55.
• The Financial Select Sector SPDR Fund (XLF) outperformed many sectors, gaining 1.1%, while the Energy Select Sector SPDR Fund (XLE) saw a decline of 0.8%.

Key Stock Movements on Monday

• Airlines and cruise line stocks saw a notable rally in response to the declining oil prices. American Airlines Group Inc. (AAL) was up by 4.5%, while Delta Air Lines Inc. (DAL) followed closely with a gain of 4%. United Airlines Holdings Inc. (UAL) was up 3.5%, and cruises such as Carnival Corp. (CCL) saw an increase of 4.5%. Other cruise companies like Norwegian Cruise Line Holdings Ltd. (NCLH) rose by 2.8%, and Royal Caribbean Cruises Ltd. (RCL) was up 0.9%.

Additionally, stocks reacting to earnings reports included ON Semiconductor Corp. (ON), which rose by 4.4%, and CenterPoint Energy Inc. (CNP), gaining 1%.

Large companies expected to report their earnings after the market close include Waste Management Inc. (WM), Cadence Design Systems Inc. (CDNS), Brown & Brown Inc. (BRO), and F5 Inc. (FFIV).

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