US stocks ended sharply higher on Monday, with the Dow Jones Industrial Average closing above the 52,000 mark for the first time as easing geopolitical tensions and a rebound in technology shares fueled a broad market rally.
The Dow gained about 306 points, or 0.59%, to finish above 52,000.
The S&P 500 advanced 1.17%, while the Nasdaq Composite climbed 2.07%.
Investor sentiment improved as concerns over weekend hostilities between the United States and Iran eased, while several high-profile corporate developments boosted shares across the technology and communications sectors.
Alphabet, Comcast and chip stocks lead gains
Alphabet was among the session’s biggest gainers, rising nearly 5% on its first trading day as a member of the Dow Jones Industrial Average.
Comcast also rallied 4% after announcing plans to separate its media and technology businesses into two publicly traded companies through a tax-free spinoff of NBCUniversal and Sky.
The transaction is expected to be completed in about a year.
Semiconductor stocks staged a strong recovery after recent weakness. The VanEck Semiconductor ETF (SMH) gained more than 3% after earlier falling as much as 3.1%.
Among individual chip stocks, Astera Labs, KLA and Applied Materials each rose more than 11%, helping drive the sector’s rebound as investors returned to artificial intelligence-related names following recent selling pressure.
SpaceX also finished higher after Nasdaq announced the newly listed company will join the Nasdaq-100 Index on July 7.
Investors focus on quarter-end positioning
Monday’s rally came during a holiday-shortened trading week, with US markets scheduled to close on Friday for Independence Day.
“It might be a little bit of light liquidity [due to the holiday-shortened trading week], so you might see bigger-than-expected moves,” Joe Tigay, a portfolio manager under Equity Armor Investments, told CNBC.
We also have the end of quarter happening soon, which can cause some window dressing to happen, so advisors are wanting what they report on their quarterly statements to look attractive to their clients, and they've been locking in some gains too. A lot of big names have had really big gains so far this year, so locking them in right now… a lot of advisors are happy to do so
Most S&P 500 companies are expected to begin reporting second-quarter earnings after mid-July.
Geopolitical developments and outlook
Markets also reacted to reports that the United States and Iran had agreed to pause hostilities and allow commercial vessels to move freely through the Strait of Hormuz following weekend military exchanges.
Oil prices rose as traders monitored whether the pause would hold. Brent crude gained 1.6% to $73.15 per barrel, while West Texas Intermediate crude advanced 2.2% to settle at $70.75.
Looking ahead, RBC Capital Markets raised its 12-month target for the S&P 500 to 8,150 from 7,900, citing continued earnings strength and a supportive macroeconomic backdrop.
With easing geopolitical concerns, renewed strength in technology shares and growing attention turning toward the upcoming earnings season, Wall Street began the week on a positive note, pushing major US indexes higher.
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