Oil above $106 caps S&P 500 and Nasdaq gains ahead of earnings

what happened

Reuters reported that the S&P 500 and Nasdaq were trading close to unchanged on Monday as a jump in oil prices weighed on technology shares. Brent futures moved above $106 a barrel, reaching their highest level in roughly two weeks after deadly strikes hit Riyadh's international airport over the weekend. Investors were also preparing for major-bank earnings and inflation figures due this week, both of which could affect the Federal Reserve's monetary-policy course.

The oil advance moderated after President Donald Trump said Russia and Ukraine had agreed to stop attacking one another's energy facilities. Trump said the arrangement followed a US deal with Moscow to supply diesel. The terms were not clear, and the proposal faced resistance in Washington. The S&P 500 communication-services group gained 1.1%, with Meta up 3.2%, while energy shares rose 1.8%. Those gains were offset by a 0.2% retreat in the benchmark's large technology companies.

Salesforce climbed 3.5% after BofA Global Research raised its rating by two steps, from “underperform” to “buy.” The move helped lift the Dow Jones Industrial Average to its highest level in nearly three weeks. At 09:40 a.m. ET, the Dow was up 107.03 points, or 0.21%, at 51,761.98; the S&P 500 had added 6.14 points, or 0.08%, to 7,817.68; and the Nasdaq Composite had fallen 10.23 points, or 0.04%, to 27,355.94.

Corporate results have now become the market's central focus. LSEG IBES data show analysts expect S&P 500 earnings to increase 30.6% in the third quarter. Goldman Sachs, Citigroup and JPMorgan Chase are scheduled to open the major US-bank reporting season on Tuesday. Clark Bellin, president and chief investment officer at Bellwether Wealth, said investors would focus on how companies use and monetize AI, whether they can preserve or expand pricing power, and how they are handling higher borrowing costs, an issue they did not face a year ago.

Treasury yields reached 24-year highs earlier this month as expensive energy raised concern that inflation could remain persistent and keep policymakers hawkish. The US Treasury market is closed on Monday for Columbus Day. Recent figures showing a smaller-than-anticipated inflation increase and weaker employment growth have reduced expectations of an imminent rate hike. That has put additional attention on US consumer- and producer-price data and retail-sales figures due later this week. CME's FedWatch tool puts the probability of a Federal Reserve rate increase this month at only 19%. Investors will also review comments from Cleveland Fed President Beth Hammack later in the day.

Chipotle Mexican Grill fell 3% after Starbucks said it was not acquiring the burrito chain. IonQ declined 4.7% after agreeing to purchase privately held cybersecurity company Elisity in an all-stock transaction worth as much as $1.3 billion. IREN gained 2% after The Information reported that Anthropic had signed a multiyear cloud agreement with the data-center operator. Decliners outnumbered advancers 1.25 to 1 on the NYSE and 1.44 to 1 on the Nasdaq. The S&P 500 recorded 9 new 52-week highs and 4 new lows, while the Nasdaq Composite registered 23 new highs and 123 new lows.

why it matters

The oil rally benefits energy shares but also raises the risk that inflation will remain difficult to contain, potentially limiting broader equity gains and keeping the Fed in focus. Bank earnings and inflation data may set the next direction for US stocks.

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