The S&P 500 Index ($SPX) (SPY) on Monday closed up +0.71%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.39%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.13%. March E-mini S&P futures (ESH26) rose +0.69%, and March E-mini Nasdaq futures (NQH26) rose +1.14%.
Stocks during the morning traded lower on an overnight spike in oil prices above $100 per barrel, but were then able to recover after President Trump told CBS News in a phone interview that “I think the war is very complete, pretty much” and that the military operation is “very far” ahead of its 4-5 week timeframe.
Oil prices on Monday initially spiked above $100 per barrel after Israel on Saturday bombed 30 Iranian fuel depots. In addition, Saudi Arabia became the latest Middle East oil producer to cut production as its local storage facilities near capacity. However, oil prices fell back later in the day after G-7 finance ministers pledged to release strategic oil reserves if necessary and after President Trump seemed to indicate that the Iran war might soon end.
In any case, there seems to be little chance that Iran will surrender after Iran’s Assembly of Experts over the weekend appointed hardliner Mojtaba Khamenei as Iran’s new supreme leader, the son of Ayatollah Ali Khamenei. Iran’s new leader has close ties to Iran’s powerful and entrenched Islamic Revolutionary Guard Corps (IRGC). President Trump said he is “not happy” with the choice of the new leader.
Stocks on Monday saw some ongoing worries about the US economy after last Friday’s weak economic news that US Feb payrolls fell by -92,000 and US Jan retail sales fell by -0.2% m/m.
Q4 earnings season is nearly over, with more than 95% of the S&P 500 companies having reported earnings results. Earnings have been a positive factor for stocks, with 74% of the 492 S&P 500 companies that have reported beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth. Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
