Wall Street Gains As Crude Tumbles, Small Caps Soar, Bitcoin Tops $68,000: What's Driving Markets Monday?

Investor sentiment turned optimistic towards risk assets early this week as plummeting oil prices, driven by Israel's decision not to target Iran's crude facilities during weekend attacks, eased concerns over an escalated Middle Eastern conflict and potential global economic disruptions.

The S&P 500 gained 0.3%, the tech-heavy Nasdaq 100 mirrored this performance and the Dow added 0.6%.

Economically sensitive small-cap stocks saw stronger gains, with the Russell 2000 soaring 1.5% after a stretch of losses in six of the last seven sessions.

West Texas Intermediate (WTI) crude – tracked by the United States Oil Fund USO – dropped over 5% in midday New York trading, heading for its sharpest one-day decline since July 2022. Natural gas prices also plunged, with Henry Hub prices falling more than 9%, poised for their steepest single-session loss since mid-January.

U.S. energy stocks weakened, with the Energy Select Sector SPDR Fund XLE standing as the sole sector in the red on Monday.

Despite the significant drop in energy prices, Treasury yields continued to rise, potentially tempering the stock market’s bullish momentum. Investors remain cautious about further U.S. fiscal policy deterioration as election season approaches.

Yields on 10-year Treasury bonds rose by 5 basis points to 4.29%, aiming for their highest close since July 11.

Gold prices held steady around $2,745 per ounce, marking no gains since last Tuesday's close.

Sentiment in cryptocurrency markets remained bullish, with Bitcoin BTC/USD up 1.4% to over $68,000, reaching a one-week high, while Dogecoin DOGE/USD jumped 4.5% in its third consecutive session of gains, eyeing the highest levels since June.

Monday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day % change
Russell 2000	2,242.10	1.5%
Dow Jones	42,381.18	0.6%
S&P 500	5,828.13	0.3%
Nasdaq 100	20,409.47	0.3%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY rose 0.54% to $581.22.
• The SPDR Dow Jones Industrial Average DIA rose 0.7% to $424.02.
• The tech-heavy Invesco QQQ Trust Series QQQ edged 0.2% higher to $496.42.
• The iShares Russell 2000 ETF IWM rose 1.7% to $222.55.
• The Financial Select Sector SPDR Fund XLF outperformed, up by 1.1%. The Energy Select Sector SPDR Fund lagged, down 0.8%.

Monday’s Stock Movers

• Airlines and cruise line stocks rallied as oil prices declined. American Airlines Group Inc. AAL was up by 4.5%, Delta Air Lines Inc. AAL, up by 4%, United Airlines Holdings Inc. UAL, up 3.5%, Carnival Corp. CCL, up 4.5%, Norwegian Cruise Line Holdings Ltd. NCLH, up 2.8%, and Royal Caribbean Cruises Ltd. RCL, up 0.9%.

Stocks reacting on earnings reports included ON Semiconductor Corp. ON, up 4.4% and CenterPoint Energy Inc. CNP, up 1%.

Large-cap companies slated to report their earnings after the close are Waste Management Inc. WM, Cadence Design Systems Inc. CDNS, Brown & Brown Inc. BRO and F5 Inc. FFIV.

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