Optimism Prevails Over War Fears; Dow (DJIA) Resumes Uptrend, Nasdaq Eyes Record Highs
Despite last week's geopolitical shocks having a significant impact on the Dow Jones, U.S. stocks started the week with robust gains...
Quick overview
- U.S. stocks opened the week with strong gains, driven by a tech rally despite previous geopolitical tensions.
- The Nasdaq Composite surged to new highs, fueled by optimism in AI and robust demand for tech stocks.
- The Dow Jones, however, closed the prior week lower, reflecting ongoing technical pressures and geopolitical concerns.
- Canadian markets also saw modest gains, supported by buying in energy and resources amid fluctuating commodity prices.
Despite last week’s geopolitical shocks having a significant impact on the Dow Jones, U.S. stocks started the week with robust gains, driven by a tech-fueled rise.
Tech-Fueled Rally Ignites U.S. Markets
U.S. equity markets roared back into action on Monday, brushing off last week’s Middle East-driven volatility. The Nasdaq Composite led the charge, boosted by robust demand for tech stocks and persistent investor optimism around artificial intelligence and earnings resilience. The S&P 500 and Dow Jones Industrial Average also advanced, continuing their longer-term uptrend and flirting with all-time highs.
On the Canadian side, the S&P/TSX Composite Index posted modest gains, trailing U.S. counterparts but staying firmly in positive territory thanks to renewed buying in energy and resources.
DJIA Chart Weekly – Dow Ended Prior Week Lower
Despite Monday’s strength, the Dow Jones had closed the previous week on a sour note. On Friday, the Dow dropped by 770 points (-1.8%), closing at 42,198, retreating below both its 100-day and 200-day simple moving averages. The index posted a 1.32% weekly loss, underscoring mounting technical pressures.
The 50-week SMA (yellow line) acted as critical support and held firm, while repeated rejection at the 20-week SMA continues to cap any sustained upside. The index remains trapped in a narrowing channel, caught between those two levels for nearly a month.
Geopolitical Tensions Threaten Stability
Markets were shaken last week after Israel launched targeted strikes on Iranian military sites, allegedly resulting in civilian casualties and the deaths of several senior figures. In response, Iran fired back with direct missile attacks, escalating the situation and spooking global markets. Investors reacted by rotating into traditional safe-havens like gold and driving crude oil prices sharply higher.
The ongoing hostilities have raised fears of a wider regional conflict, with the Strait of Hormuz—a critical oil passage—again in focus. However, these tensions failed to derail today’s rally, a sign of the market’s current resilience and appetite for risk.
US and Canadian Stock Markets Close Strongly Higher on Monday
- S&P 500 finished at 6,033.11, posting a gain of +56.14 points (+0.94%), driven by broad-based buying in large-cap tech and industrials.
- Nasdaq Composite surged to 19,701.21, up +294.39 points (+1.52%), with strong momentum in AI-related and chip stocks lifting the index to fresh record highs.
- Dow Jones Industrial Average climbed +317.30 points (+1.1%) to settle at 42,515.09, as blue-chip names saw renewed interest amid easing macro concerns.
- Russell 2000, a benchmark for small-cap stocks, rose to 2,124.13, gaining +23.62 points (+1.12%), signaling strength across risk-sensitive and domestic-focused sectors.
- Canada’s S&P/TSX Composite Index ended the session at 26,568.61, up +64.26 points (+0.24%), supported by modest gains in energy and materials amid fluctuating commodity prices.
Nasdaq Nears Record as Bulls Stay in Control
Despite lingering geopolitical risk, investors showed renewed confidence on Monday. The Nasdaq is now approaching its June high, signaling that the bulls remain firmly in charge. Positive sentiment around earnings season, cooling inflation expectations, and accelerated innovation in AI and chip sectors continue to serve as tailwinds for tech-heavy indices.
Conclusion: While the Dow closed last week with significant losses amid intensifying conflict in the Middle East, Monday’s session reflected a strong turnaround in investor sentiment. The Nasdaq and S&P 500 appear poised to resume their march higher, and as long as earnings and innovation remain supportive, the current geopolitical headwinds may only offer temporary resistance to the broader uptrend.
Dow Jones Live Chart
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