US close: Stocks jump, Dow hits record on hopes of US-Iran de-escalation

(Sharecast News) - US stocks surged on Monday, with the Dow Jones Industrial Average climbing to a new record and the S&P 500 hitting a two-month high, as renewed hopes of a de-escalation in the Middle East sent oil prices firmly lower.

"While the world confronts yet another classic Trump Groundhog Day on Iran, markets have opted to take the chance to rally while it lasts on the opening day of August trading," Chris Beauchamp, chief market analyst at IG.

"For the moment this has the feel of a general rebound about it, with most indices advancing broadly, with no sign of any 'unrotation' of the recent rotation out of tech."

The Dow gained 1.34% to 53,178.41, topping an earlier record closing high 53,055.91 reached on 6 July. The S&P 500 finished 1.5% higher at 7,600.50, its highest since 2 June and only its second close above the 7,600 mark. Meanwhile, the Nadsaq Composite surged 2.1% to 25,913.90, marking its highest close since 15 July.

Brent crude finished 4.7% lower at $83.77 a barrel, while WTI crude fell 5.1% to $80.34 after US President Donald Trump once again pulled back from threats to bomb Iran, saying talks with Tehran would take place today.

Trump claimed he had pulled his threatened attacks at the behest of Gulf states and also, without any credible evidence, said Iran had missiles that could strike the US.

Iran said it was nearing a deal with Oman on opening a safe route through the Strait of Hormuz for commercial shipping. However, Iranian foreign ministry spokesman Esmaeil Baghaei told a weekly press briefing that Iran is not currently holding any talks with the US, contradicting Trump.

Chip stocks bounced, erasing earlier losses as the sector continues to experience volatile swings. Intel, Micron Technology, Broadcom and Nvidia all finished in positive territory after opening in the red.

Software stocks were also in demand, including Salesforce, Microsoft and Adobe. Other heavyweights such as Amazon and Alphabet extended gains made last week following their bumper quarterly results.

Oracle was another high riser in the tech sector, extending gains after last week's AI deal with Google Cloud. The companies announced that Google's Gemini would be plugged into Oracle's Fusion Cloud and NetSuite systems.

Travel stocks were strong performers as the falling oil price eased fuel cost concerns, with airlines American and United rising strongly, along with cruise operators Carnival and Norwegian.

Meanwhile, Palantir Technologies and SpaceX rose ahead of the companies' quarterly results, with both due out over the next 24 hours.

In M&A news, investment firm KKR jumped after agreeing to acquire listed medical device manufacturer Integer Holdings in an all-cash transaction valued at around $5.7bn, while Atkore surged after the electrical and infrastructure solutions company announced a $3.8bn takeover bid from Italian peer Prysmian.

On the macro front, S&P Global's US manufacturing purchasing managers index was revised up to 53.9 for July, slightly ahead of a preliminary reading of 53.8, matching June's level and marking a twelfth straight month of improving operating conditions. Output growth eased to its weakest pace since March and new orders rose at a slower rate for the third month running, while export demand continued to fall amid tariff pressures and subdued overseas markets. Input cost inflation eased to a fourmonth low but remained elevated due to higher energy prices and tariffs, prompting businesses to continue raising selling prices.

Elsewhere, the US manufacturing sector accelerated in July, with the Institute for Supply Management's PMI rising to 55.6 from 53.3 in June for its strongest reading since May 2022 - pointing to a twentyfirst straight month of expansion. The survey showed broad improvement across key components, with new orders increasing for a seventh month to 56.7, production jumping to 58.5, its highest since late 2021, and employment moving back into growth territory at 52.8% for the first time in almost three years. Backlogs also strengthened, rising to 55%.