WASHINGTON (dpa-AFX) - Stocks moved to the downside early in the session on Monday but showed a significant turnaround over the course of the trading day. The major averages climbed well off their worst levels of the day and firmly into positive territory.
The major average saw further upside late in the day, reaching new highs for the session. The Nasdaq surged 280.84 points or 1.2 percent to 23,183.74, the S&P 500 jumped 69.35 points or 1.0 percent to 6,886.24 and the Dow climbed 301.68 points or 0.7 percent to 48,218.25.
The strength that emerged on Wall Street came as traders kept an eye on developments in the Middle East after weekend talks between the U.S. and Iran failed to produce an agreement.
'They have chosen not to accept our terms,' U.S. Vice President JD Vance said in a brief news conference but left open the possibility that terms could still be reached. Iran said that 'unreasonable U.S. demands' prevented the progress of the negotiations.
Traders seemed to shrug off news that President Donald Trump has imposed a blockade of all maritime traffic entering and exiting Iranian ports.
U.S. Central Command said the blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman.
'Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,' Trump said in a post on Truth Social.
Trump also said the U.S. military is 'locked and loaded' and prepared to 'finish up the little that is left of Iran' at an 'appropriate moment.'
While the news contributed to a significant increase by the price of crude oil, traders seem optimistic Trump will back down once again and avoid a return to war.
Traders were also looking ahead to the start of earnings season, with companies largely expected to report strong financial results despite the Middle East conflict.
Sector News
Software stocks moved sharply higher following recent weakness, resulting in a 4.6 percent spike by the Dow Jones U.S. Software Index.
Substantial strength also emerged among computer hardware stocks, as reflected by the 4.4 percent surge by the NYSE Arca Computer Hardware Index.
Brokerage stocks also showed a significant move to the upside, driving the NYSE Arca Broker/Dealer Index up by 2.9 percent.
Transportation, semiconductor and networking stocks also saw considerable strength, while utilities and natural gas stocks moved to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index slid by 0.9 percent.
European stocks also moved to the downside on the day but closed well off their worst levels. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the German DAX Index and the French CAC 40 Index both dipped by 0.3 percent.
In the bond market, treasuries showed a lack of direction over the course of the session before closing moderately higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 1.8 basis points to 4.299 percent.
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