MARKET SNAPSHOT
U.S. stocks rose, while oil futures extended their slide to four sessions. Treasury yields were little changed. The dollar strengthened, while gold futures settled lower, snapping a three-session winning streak.
MARKET WRAPS EQUITIES
U.S. stocks rose as oil futures tumbled due to hopes of a resumption in U.S.-Iran negotiations, causing a relief rally that pushed high-risk technology stocks to record highs.
The Dow Jones Industrial Average rose 0.7%.The S&P 500 gained 1.5% and the tech-heavy Nasdaq Composite jumped 2.3%, a new record high. It was the Nasdaq's first record close since June 2, according to Dow Jones Market Data.
President Donald Trump signalled an openness to meeting Iranian officials coming to New York for a gathering of the United Nations General Assembly. That offset the market impact of ongoing attacks on Saudi Arabian infrastructure from Houthi fighters in Yemen.
In Asian equity markets, the South Korean Kospi added 1.7% as chip maker Samsung Electronics jumped 5%. Japan's Nikkei 225 rose 1.4%.
In China, the Shanghai Composite rose 1%, the Shenzhen Composite closed 1.1% higher and the ChiNext Price Index gained 0.8%.
Hong Kong's Hang Seng Index ended 1.2% higher.
Stocks in Australia were flat Monday, as the S&P/ASX 200 Benchmark Index held steady. New Zealand's S&P/NZX 50 Index rose 0.6%.
COMMODITIES
Oil futures extended their slide to four sessions on easing concerns about oil flows out of the Middle East and expectations for renewed diplomatic efforts to bring the U.S. and Iran back to the negotiating table.
"Prospects for renewed U.S.-Iran engagement during this week's U.N. General Assembly have created a potential path toward de-escalation, despite the absence of a formal breakthrough," Gelber & Associates said in a note. Continued Houthi attacks and shipping constraints "indicate that the selloff reflects improving expectations rather than normalized Middle Eastern flows."
WTI settled down 4.5% at $95.78 a barrel and Brent fell 3.4% to $100.34 a barrel.
Gold futures settled lower, snapping a three-session winning streak.
"Several conflicting fundamental factors are shaping the market between support and pressure," Rania Gule of XS.com said in a note. Higher interest rates and U.S. yields have become a direct headwind for gold, but "I do not believe that higher interest rates necessarily mark the beginning of a prolonged bearish trend," she said. A decisive break above $4,400 would show buyers able to absorb the impact of a stronger dollar and higher yields, while failure to break through that level keeps open the possibility of gold testing previous support zones, Gule added.
Front-month gold settled down 0.9% in New York at $4,345.80 a troy ounce. Silver fell 1.1% to $65.825 a troy ounce.
TODAY'S TOP HEADLINES
Oil Prices Fall for Fourth Day as Supply Concerns Ease
Oil prices fell for a fourth consecutive session Monday as improving flows through the Strait of Hormuz and prospects for renewed diplomacy over the Iran conflict eased immediate supply concerns.
Brent crude futures fell 3.4% to $100.34 a barrel, and West Texas Intermediate dropped 4.5% to $95.78 a barrel, their lowest closes since Sept. 8.
Improving traffic through the Strait of Hormuz and renewed diplomatic efforts are reducing the geopolitical risk premium in oil prices, MUFG said. Still, Saudi export constraints and continued security risks around the Red Sea leave the market vulnerable to further supply disruptions.
Qatar Says It's Ready to Resume LNG Operations Within Weeks of Hormuz Reopening
Qatar could restore normal operations at parts of its liquefied natural gas facilities within weeks of the reopening of the Strait of Hormuz, the Minister of State for Energy Affairs Saad Sherida Al-Kaabi said, even as extensive damage from Iranian attacks is expected to constrain production for years.
Qatar, one of the world's top three LNG exporters before the war alongside the U.S. and Australia, halted LNG production earlier this year following the near-closure of the strait and Iranian attacks on Ras Laffan-the world's largest LNG export hub. The strikes knocked out around 17% of the facility's capacity.
Al-Kaabi said Sunday that repairs to the damaged gas-to-liquids facility are expected to be completed in the first quarter of 2027, while restoring the two damaged LNG trains could take as long as three years.
U.S. Proposes $5 Billion to Kickstart Fund to Rebuild Gulf Energy Sites
WASHINGTON-The Trump administration has proposed investing $5 billion in a new fund that would help Middle East countries rebuild energy infrastructure battered in the Iran war and reduce their reliance on the Strait of Hormuz to transport oil and gas, according to U.S. and Middle Eastern officials and documents seen by The Wall Street Journal.
The move is a tacit acknowledgment that the seven-month conflict has roiled the global energy market and destroyed regional pipelines and refineries that will be costly to rebuild.
Under Trump's plan, the U.S. would seek a matching contribution from eight Middle Eastern partners-Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, Oman, Iraq and Jordan-with the goal of generating a $10 billion investment fund. The investment would be called the Partnership for Allied Trust and Construction, or Pact.
Fed's Goolsbee Says Inflation Components Matter Just as Much as the Overall Pace
The Federal Reserve just started raising interest rates, but the big question now is how much longer officials will continue tightening monetary policy. The answer, it seems, depends not only on the trajectory of inflation, but also the composition, according to Chicago Fed President Austan Goolsbee.
The Federal Open Market Committee raised the Fed funds range to 3.75% to 4% at the conclusion of last week's policy meeting. The tighter monetary policy is aimed at more speedily returning inflation to the Fed's 2% target.
Goolsbee told reporters Monday that he supported the rate increase. He isn't currently a voting member of the FOMC this year, but will be one next year. The latest summary of economic projections showed that FOMC officials see one additional rate increase on tap for this year, but no further rate increases next year.
Paramount Settles States' Antitrust Suit, Clearing Way for Warner Megadeal
Paramount has reached a settlement with state attorneys general that includes a host of concessions and investments in the U.S. entertainment industry, clearing the way for its hard-fought $81 billion merger with Warner Bros. Discovery that is poised to reshape Hollywood.
The settlement announced Monday stops short of forcing Paramount Chief Executive David Ellison to make significant structural changes to the company, but includes penalties such as the forced sale of cable channels and Paramount's stake in Miramax if it doesn't make good on its promises.
The company behind hits like "The Godfather," "Top Gun," "South Park" and "Yellowstone" agreed to invest at least $1.5 billion more in domestic production over the next five years and commit funds for a workforce-training program for the entertainment industry. While the company didn't have to agree to remain in California as part of the settlement, it said it would keep Warner's and Paramount's Los Angeles studio lots for moviemaking.
OpenAI Urges Washington to Lead Global Effort to Create AI-Safety Standards
OpenAI is asking the U.S. government to lead an effort with other countries to develop global safety and security standards for building cutting-edge artificial-intelligence systems.
In a proposal published Monday, the company suggested that countries worldwide should set common measures for evaluating forthcoming self-improving AI systems and establish secure channels to share emerging threats.
The U.S. Center for AI Standards and Innovation could work with the emerging network of AI safety institutes around the world-such as existing groups in the U.K., France, and Singapore-to create the standards, the company said.
Expected Major Events for Tuesday 08:00/TAI: Aug Employment / Unemployment
08:00/TAI: Aug Export Orders
21:00/SKA: Sep Consumer Sentiment Index
23:00/AUS: Sep Australia Flash PMI
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