Kamal Ghorui
Wall Street’s main indices edged higher in choppy trade on Monday, recovering from the previous session’s sharp losses, even as the Middle East conflict widened and kept investors cautious.The Dow Jones Industrial Average rose 0.48 per cent, the S&P 500 gained 0.32 per cent, and the Nasdaq Composite advanced 0.19 per cent in early trade, according to Reuters.The rebound came after US President Donald Trump said Washington was in serious discussions with a “more reasonable regime” to end the war, while reiterating warnings that Iran must reopen the Strait of Hormuz or face US strikes on its oil and power infrastructure.Tensions escalated further after Yemen’s Iran-backed Houthi militia entered the conflict over the weekend.Energy stocks led gains, with the S&P 500 Energy Index rising 1.5 per cent. Shares of Exxon Mobil climbed 3 per cent, while Chevron added 1.5 per cent.“The S&P 500 is still down less than 10% (since the war began). In many ways, investors have been affected less by the implications of the Strait of Hormuz being closed than I would have thought,” said Sam Stovall, chief investment strategist at CFRA Research, quoted Reuters.“Today’s action is probably more of a technical bounce because many sectors and sub-industries are in oversold condition,” he added.Financial stocks also moved higher, with the sector gaining 0.8 per cent after the US Department of Labor issued guidelines clarifying how trustees can include alternative assets such as private equity and cryptocurrencies in 401(k) retirement plans.Asset managers advanced, with Blackstone up 1.7 per cent, KKR gaining 1.4 per cent, and Apollo Global Management rising 1 per cent.Overall, nine of the 11 major S&P 500 sectors traded in positive territory.Despite the uptick, major US indices including the Dow, Nasdaq and Russell 2000 remain in correction territory since the conflict began.Morgan Stanley downgraded global equities to “equal weight” from “overweight”, but noted that capital flows into US equities and bonds have strengthened, suggesting the US may regain its safe-haven appeal.Investors are now awaiting remarks from Federal Reserve Chair Jerome Powell and New York Fed President John Williams later in the day, alongside key labour market data this week, including March nonfarm payrolls.Rising oil prices linked to the conflict have reignited inflation concerns, with market participants now pricing out any Federal Reserve rate cuts this year, compared to expectations of two cuts before the war, according to CME Group’s FedWatch Tool.Among individual stocks, Sysco plunged 12 per cent after announcing a $29 billion acquisition of Jetro Restaurant Depot, including debt.Metal stocks rallied as aluminium prices hovered near four-year highs, with Alcoa and Century Aluminum surging 12 per cent and 13.6 per cent, respectively.US markets will remain closed on Friday for the Good Friday holiday.Advancing stocks outpaced decliners by a ratio of 2.69-to-1 on the NYSE and 1.49-to-1 on the Nasdaq. The S&P 500 recorded 19 new 52-week highs and four lows, while the Nasdaq saw 17 new highs and 121 new lows.
