A week after a midterm-driven sell-off, Wall Street had its best day since April. Oil plunged on Trump's Iran comments, chip stocks soared, and only Nvidia missed the party. Next up is a US inflation report that could decide whether the Fed raises rates.
US stocks surged on Monday, November 9. The S&P 500 gained 2.35% to 7,549.94, its biggest one-day rise since April 8, and the Nasdaq Composite jumped 2.74% to 25,253.14, its best session since July 30, according to Reuters. The Dow Jones Industrial Average added 1,104.02 points, or 2.15%, to close at 52,389.75. The main trigger was a sharp drop in crude oil after President Donald Trump said renewed US strikes on Iran were highly unlikely. That eased inflation fears that have hung over markets all year.
Oil's Biggest Slide in Months
Brent crude futures settled down $5.75, or 5.85%, at $92.57 a barrel on Monday, and kept falling after settlement to lose more than $7 a barrel on the day. That took prices to their lowest since late August, Reuters reported. US West Texas Intermediate settled down $3.98, or 4.38%, at $86.85. Brent had already fallen 16% the week before, its steepest weekly decline since the start of the Covid-19 pandemic.
On Sunday, Trump said he was highly unlikely to order fresh attacks on Iran as long as talks to end the conflict made progress. Analysts at TACenergy said this "seems to have encouraged sellers on the prospects for peace even while the actual fighting is not slowing down."
The risks have not gone away. Both the US and Iran reported that ships had been hit in or near the Strait of Hormuz. Yemen's Houthis claimed an attack on Saudi Aramco's corporate office in Riyadh, and a fire broke out after Saudi Arabia's East-West pipeline was struck, though its operations were not affected. A senior Iranian security official said Tehran would not negotiate unless Washington met seven conditions set out in a June interim agreement.
Supply is also building. JPMorgan estimated the global oil surplus at about 1.4 million barrels per day in October, and a Reuters survey found that OPEC output rose by 1.38 million barrels per day last month to 22.87 million.
Chips Rebound, Nvidia Left Behind
The rally was broad. All 11 major S&P 500 sectors rose, nine of them by more than 1%, and industrials and consumer discretionary each gained more than 3%. The Philadelphia Semiconductor Index jumped 6.9% after plunging more than 12% the previous week. Advanced Micro Devices soared 13.3% and Broadcom rose 8.8%.
Nvidia was the only stock in the chip index to fall. It closed down more than 4% after its board opened an internal investigation into whether CEO Jensen Huang had been targeted by a foreign intelligence operation. Elsewhere, Constellation Energy jumped more than 10% after its adjusted third-quarter profit beat expectations, and KKR rose after posting record quarterly profit.
The rebound reversed part of last week's sell-off, which followed Democrats' sweeping midterm victory and fears that new regulation could slow the AI data-centre boom. "The selloff was so dramatic that some names became very cheap and the buyers are here to buy the dip," Anna Rathbun, founder and CEO of Grenadilla Advisory, told Reuters.
Asia Extends the Rally
Gains spread to Asia on Tuesday morning. South Korea's KOSPI rose more than 5% and Japan's Nikkei gained about 3% in early trade, Reuters reported via Business Recorder. MSCI's broadest index of Asia-Pacific shares climbed 1.5%, moving further away from the seven-month low it hit last week. Brent eased another 1% to about $91.56.
Not everyone thinks the oil drop will last. "The risk now is that markets have moved too far, too quickly," said Nick Twidale, chief market strategist at ATFX Global. He warned that any sign of faltering negotiations could quickly push prices back up.
Indian investors will have to wait a day to react. India's equity, currency and debt markets are closed on Tuesday for a local holiday, and trading resumes on Wednesday, November 11, Hindustan Times reported, citing Reuters. On Monday, the Sensex closed up 0.13% at 81,106.65 and the Nifty 50 rose 0.23% to 25,044.65.
Why It Matters for India
This is our analysis, not a market forecast: India imports most of its crude oil, so a sustained fall in Brent would generally ease pressure on inflation, the trade deficit and the rupee, which ended Monday near 93.93 per dollar. Wednesday's session will be the first chance for Indian stocks to price in Monday's global rebound. If oil heads back toward $100, that relief would quickly fade.
What's Next: The CPI Test
The next big test is the US Consumer Price Index for October, due on Tuesday. The report is released at 8:30 AM Eastern time, which is 7:00 PM IST. Economists polled by Reuters expect headline prices to have risen 0.3% and core prices 0.2%. Even with oil falling, traders see an 84% chance that the Federal Reserve raises rates in December, up from 74% a week earlier, according to the CME FedWatch tool, after a strong October jobs report. A hot inflation reading could cut Monday's relief rally short. The Producer Price Index follows on Friday, and CoreWeave's earnings this week will test sentiment toward AI stocks again.