Stocks opened August with a broad rally Monday as a turn toward diplomacy in the U.S.–Iran conflict knocked crude prices sharply lower and a surprisingly strong read on American factories reinforced confidence in the economy heading into a heavy week of earnings and labor data.

The Dow Jones Industrial Average closed at an all-time high, settling at 53,178.41 after advancing 693.38 points, or 1.32%. The S&P 500 gained 1.48% to finish at 7,600.50, while the Nasdaq Composite ended 2.1% higher at 25,913.9. The move follows a volatile July in which the tech-heavy indexes gave back significant ground.

The catalyst came over the weekend. Oil prices dropped after President Trump said he had called off a planned strike on Iran in favor of negotiations aimed at reopening the Strait of Hormuz, with talks set to begin Monday. Trump said appeals from Saudi Arabia, the United Arab Emirates and Qatar factored into the decision to pause the operation.

Commodities

West Texas Intermediate lost roughly 5% to settle near $80 a barrel as both Washington and Tehran signaled that discussions on restoring tanker traffic through Hormuz remain active, raising expectations of recovering Middle East supply. Brent, the benchmark for two-thirds of global crude, slid more than 7% in early trade before recovering to trade about 5% lower near $83.51 a barrel. The strait itself remains largely closed, with tankers still coming under attack and turning back.

The retreat is a meaningful giveback. Brent had climbed roughly 24% during July, its strongest monthly gain since March, on supply fears tied to the war, Houthi attacks in the Red Sea and falling U.S. crude inventories. The conflict, now in its sixth month, has whipsawed the crude market — Brent topped $126 a barrel in April before surrendering its entire war premium last month, only to spike again when a two-month ceasefire collapsed in July.

Gold gave back ground as risk appetite returned. December futures opened at $4,135.20 an ounce, up 0.7% from Friday, before easing back through the morning session. Spot gold traded near $4,064 as investors positioned ahead of the week’s economic releases. The metal has been under pressure from a punishing rate backdrop, with the 30-year Treasury yield above 5.25% — territory last seen in 2007 — and the 10-year settling near 4.74% late last week.

The Data

American manufacturers delivered the day’s biggest upside surprise. The Institute for Supply Management said its Manufacturing PMI registered 55.6% in July, up 2.3 percentage points from June and the highest reading since May 2022. It marked the seventh straight month of expansion in the sector and the 21st consecutive month of growth in the overall economy. New orders expanded for a seventh month at 56.7%.

The internals were arguably stronger than the headline. Employment swung back into expansion at 52.8 after June’s contractionary 49.7, well ahead of forecasts, while prices paid eased to 71.1 from 73.0. Economists had broadly looked for a reading closer to 54.

Market Movers

Artificial intelligence infrastructure names led the tape. CoreWeave, which rents graphics processors and other hardware to AI developers, was up more than 18% with an hour left in the session, as recent earnings reports across the sector convinced investors that demand for AI hardware is still climbing. The Livingston, New Jersey-based company reports second-quarter results August 11.

Alphabet Class C shares rose 4.16%, extending last week’s advance on strength in search and cloud. Berkshire Hathaway’s Greg Abel disclosed a $23 billion cash deployment into Alphabet stock.IMAX shares hit an all-time high after the company posted more than $50 million in global ticket sales for a third consecutive weekend.

SpaceX added 2% ahead of its first quarterly report as a public company, with a key insider lockup expiring Thursday and short sellers holding 32.2% of the tradable float, according to S3.

What’s Ahead

Palantir reports after Monday’s close. Caterpillar and SpaceX are on deck Tuesday, and the week culminates Friday with the July employment report — the reading most likely to determine whether the Federal Reserve under Chairman Kevin Warsh stays hawkish into September. June job openings arrive Tuesday, with private payrolls and services data Wednesday.

For business owners, Monday’s action cuts two ways. Cheaper crude eases freight, fuel and input costs that have squeezed margins since February. But the diplomatic opening remains unconfirmed, and the strait is still shut — meaning today’s relief is a wager on talks that have collapsed twice already this year.

JBizNews Desk | Wall Street

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