US Stocks Edge Higher as AI Rally Continues and Oil Surges on Middle East Fears

US stock markets started the week in positive territory, with technology shares once again helping push the S&P 500 and Nasdaq Composite to fresh record highs, despite growing geopolitical concerns surrounding the Middle East.
Wall Street closed Monday’s session with modest gains. The Dow Jones Industrial Average rose 0.2%, while both the S&P 500 and Nasdaq added roughly 0.2% and 0.1% respectively, extending the bullish momentum that has dominated recent weeks.
Investor confidence has remained supported by stronger-than-expected US employment data released last week, which reinforced expectations that the US economy continues to show resilience despite elevated interest rates and slowing global growth.
However, market attention increasingly shifted toward geopolitical risks after US President Donald Trump described Iran’s response to a proposed peace initiative as “totally unacceptable,” intensifying concerns over the future of stability in the Middle East.
Oil prices reacted sharply to the escalation in rhetoric. West Texas Intermediate crude climbed 2.9% to settle near $98.15 per barrel, while Brent crude rose almost 3% to around $104.21 per barrel amid fears over potential disruptions to energy flows through the Strait of Hormuz.
Technology stocks delivered mixed performances. Most of the so-called “Magnificent Seven” traded lower, although NVIDIA continued to outperform, gaining 2% to another record high as enthusiasm around artificial intelligence remained strong.
Semiconductor shares also extended recent gains. Intel rose 3.6%, while Micron Technology advanced 6.5%, building on the strong rally seen late last week.
Elsewhere, earnings-related volatility remained active. Shares of Circle Internet Group jumped 16%, while Fox Corporation rose 8%. Meanwhile, Constellation Energy slipped more than 1%.
Investors are now turning their attention toward the upcoming US Consumer Price Index report, widely viewed as the week’s most important economic release. The inflation reading could significantly shape expectations for Federal Reserve policy and the future path of interest rates.
Market participants are also closely watching the anticipated summit between Trump and Chinese President Xi Jinping, where trade, technology, artificial intelligence, and geopolitical tensions are expected to dominate discussions.
In fixed-income markets, the yield on the benchmark 10-year US Treasury note rose above 4.41%, up from roughly 4.36% on Friday, reflecting lingering inflation concerns and uncertainty surrounding future monetary policy.
Meanwhile, gold futures edged 0.2% higher to around $4,735 per ounce as investors maintained safe-haven exposure. Bitcoin traded near the $82,000 level with limited movement, while the US Dollar Index gained 0.1% to 97.95.
Market Outlook
Global markets are expected to remain highly sensitive in the coming sessions as investors await US inflation data that could reshape expectations for interest rates, bond yields, and equity valuations.
A stronger-than-expected CPI reading could trigger renewed volatility across financial markets, reinforcing expectations that the Federal Reserve may keep rates elevated for longer. Such an outcome would likely pressure technology and growth stocks while supporting the US dollar and Treasury yields.
On the other hand, softer inflation data could extend Wall Street’s rally, particularly in artificial intelligence and semiconductor shares, while increasing optimism around possible rate cuts later in the year.
Beyond inflation, geopolitical tensions in the Middle East and the outcome of the anticipated US-China summit will remain major drivers of oil prices, investor sentiment, and broader market direction.