Stocks Post Their Best Day Since April as Oil Slides and Buyers Rush Back

The S&P 500 jumped 2.35% on Monday, its best day since April 8, as sliding oil prices and a wave of dip-buying reversed much of last week's AI-led rout.

A rally that reached almost everything

The Dow Jones Industrial Average rose 1,104.02 points, or 2.15%, to 52,389.75. The Nasdaq Composite gained 673.72 points, or 2.74%, to 25,253.14.

All 11 S&P 500 sectors finished higher. Industrials led with a gain of 3.82%, technology rose 3.73%, and energy added the least, up 0.52%.

Small caps outran the big indexes. The Russell 2000 rose about 3.1%.

The VIX, Wall Street's volatility gauge, fell more than 20%. The fear that powered last week's sell-off drained out of the market in a day.

Even after the surge, the S&P 500 sits about 3.4% below the all-time high it set last month.

Cheaper oil did the heavy lifting

Oil fell hard after President Donald Trump told CNN on Sunday that he was "highly unlikely" to order new attacks on Iran if talks to end the war progress.

December West Texas Intermediate crude settled at $86.85 a barrel, down $3.98, or 4.38%. January Brent crude settled at $92.57 a barrel, down $5.75, or 5.85%.

Brent has fallen a long way fast. It lost 16% last week, its steepest weekly drop since the start of the COVID-19 pandemic.

At the start of the month it traded above $112 a barrel.

Qatar's prime minister, the chief mediator between Washington and Tehran, met Trump at the White House on Monday. Prices kept sliding after settlement, a sign traders were still shedding the war premium.

Cheaper crude eased the inflation fears that have stalked stocks all month. Fuel costs feed directly into the price readings the Federal Reserve watches.

Chips led, and Nvidia sat it out

Chip stocks powered the rebound. Advanced Micro Devices surged 13.26%, recouping the 11% it lost last week, and Broadcom rose 8.78% to $319.48.

Nvidia went the other way. It fell 4.27% to $178.67, and Reuters reported it was the semiconductor index's only decliner on Monday.

The drop came as Nvidia's board investigates whether a foreign intelligence effort targeted Chief Executive Jensen Huang, a story TickerGrove covered Sunday.

Morgan Stanley and UBS had both called last week's AI rout overdone, Reuters reported. Monday's tape suggested dip-buyers agreed with them.

"Two days doesn't make a trend, but this violent rebound off Thursday's lows feels real," Mizuho's Daniel O'Regan wrote, in Barron's account of the session.

Earnings helped beyond chips. Constellation Energy jumped 10.46% to $276.09 after adjusted earnings of $5.06 a share beat expectations.

Constellation also raised its full-year guidance to between $12.50 and $12.80 a share. KKR rose 1.67% to $98.09 after its quarterly profit hit a record.

What remains unknown

One big day does not settle whether last week's rout was a washout or a warning. Monday's rally leaned on diplomacy that has not yet produced a deal.

Bonds barely budged while stocks surged. The 10-year Treasury yield ended little changed, near 4.86%, and December rate-hike fears persisted after Friday's strong jobs report.

The next test arrives quickly. October's consumer price index lands Tuesday at 8:30 a.m. Eastern time, and the producer price index follows on Friday.

One CPI caveat: the Bureau of Labor Statistics collected no October 2025 prices during the federal shutdown. Some 12-month inflation changes therefore may not be published.

Earnings keep coming, too, with CoreWeave, Applied Materials and Cisco Systems among this week's reporters.

Unknowns that matter: whether the Iran talks produce an agreement, and whether inflation revives the case for higher rates.