The Dow Jones Industrial Average (DJIA) gained 120 points, or 0.3%, on Monday, marking the first trading session after the Good Friday market closure and following last week's rally, which saw gains of 3% for the DJIA, 3.4% for the S&P 500, and 4.4% for the Nasdaq Composite [1]. The index reached toward 46,700 in early trading but settled around 46,500 by midday. The S&P 500 and Nasdaq Composite also posted gains of 0.4% and 0.5%, respectively, as traders digested the March Nonfarm Payrolls (NFP) report, which showed the economy added 178,000 jobs, far exceeding expectations of 60,000 [1].
The Institute for Supply Management (ISM) Services PMI for March came in at 54, below the consensus forecast of 55 and down from 56.1 in February, marking the 21st consecutive month of expansion. However, the Employment Index dropped sharply to 45.2 from 51.8, its lowest since December 2023, indicating contraction. The Prices Paid Index surged to 70.7 from 63, reflecting higher oil and fuel costs tied to the Middle East conflict. ISM chair Steve Miller highlighted that Iran-related cost impacts dominated respondent commentary, with widespread reports of increased gas and diesel prices. Despite these cost pressures, the New Orders Index rose to 60.6 from 58.6, its highest since February 2023, suggesting resilient demand in the services sector [1].
Oil prices were volatile during Monday's session due to conflicting reports on US-Iran diplomacy. A draft ceasefire proposal from Egyptian, Pakistani, and Turkish mediators called for a 45-day ceasefire and reopening of the Strait of Hormuz, but Iran rejected the proposal, demanding a permanent end to the conflict with guarantees against future attacks. Despite the rejection, US equities maintained gains, indicating that markets may be becoming desensitized to failed diplomatic efforts. West Texas Intermediate (WTI) crude for May delivery rose 0.7% above $112 per barrel, while Brent crude gained 0.6% above $109 [1]. President Donald Trump warned of US strikes on Iran's infrastructure if the Strait is not reopened by Tuesday, though he softened his stance on Monday. Michael Rosen, chief investment officer at Angeles Investments, cautioned that markets may be underestimating the energy disruption, warning that elevated prices could persist longer than expected [1].
CONCLUSION
The Dow Jones and broader US equity markets posted modest gains despite volatile oil prices and ongoing geopolitical tensions, supported by strong job growth and resilient demand in the services sector. However, surging energy costs and warnings from analysts suggest that markets may face prolonged price pressures if Middle East disruptions continue. Investors should remain cautious as diplomatic uncertainty and elevated oil prices could impact future market performance.