Market Indexes Rally as Oil Retreats and Chip Stocks Surge

Oil fell on Monday. Bond yields eased, semiconductor stocks threw a party, and the major stock market indexes showed up with potluck dishes.

The Nasdaq Composite (NASDAQINDEX: ^IXIC) climbed 1.8% as of 12:04 p.m. ET, the S&P 500 (SNPINDEX: ^GSPC) rose 1.2%, and the Dow Jones Industrial Average (DJINDICES: ^DJI) managed 0.5%. The S&P is now roughly 1% from the record high it set last month, which seemed a lot further away on Friday.

^IXIC data by YCharts

Crude backed down and everything else took off

Let's start with oil, since it inspired everything else.

The Saudi East-West pipeline may be out of commission for the next month, but the state-run Aramco oil company loaded seven large tankers with oil over the weekend. Only a handful of vessels are moving through the Strait of Hormuz, but the Saudis are pushing out some serious oil volume anyhow. Brent crude dropped about 3.4% to $100.30 after flirting with $110 last week.

Lower oil lifted some pressure from Treasury bonds too, with the 10-year yield sliding more than 3 basis points to 4.96%.

That gave technology room to run. Meta Platforms (NASDAQ: META) jumped 8.6% because it paired the bullish market mood with a fresh success. The Muse AI agent topped free U.S. iPhone downloads for three straight days.

The same tidbit drove chip stocks higher, too. Advanced Micro Devices (NASDAQ: AMD) rose 9.1% and Intel (NASDAQ: INTC) gained 14% on the theory that all those Muse users will need somebody's chips. Meta was the largest contributor to the Nasdaq Composite and S&P 500 indexes today.

Fun fact: AMD's market cap crossed $1 trillion for the first time. Intel's all-time peak is still just $707 billion. The tables have turned in Silicon Valley.

Crypto kept Friday's momentum going, too. Bitcoin (CRYPTO: BTC) is back above $85,000 for the first time since January. This move doesn't affect the stock indexes, but it underscores a bullish market sentiment.

Image source: Getty Images.

This rally depends on crude staying down

So Wall Street is off to a good start this week, but it's not all rainbows and unicorns.

Two meetings this week could matter more than Monday's oil discount did.

• Chinese President Xi Jinping visits the U.S. from Sept. 23 to 25 to talk tariffs, AI, and critical minerals. Treasury Secretary Scott Bessent described his weekend session with Vice Premier He Lifeng as a very successful engagement. The two sides are discussing tariff cuts on $30 billion of goods apiece.
• Meanwhile, the U.N. General Assembly convenes, and Trump has floated the possibility of meeting Iran's president there.

But the oil market remains the variable that decides most of the market mood. Higher-for-longer energy makes further interest rate boosts more likely, and the longer the shock lasts, the more it seeps into everything else. The Fed already expects at least one more bump before the end of 2026, but higher oil prices could inspire two or more.

The gas pump tells the story. Regular gas now averages nearly $4.48 a gallon, up from about $4.32 a week ago and $3.18 last year. Diesel hit yet another all-time record on Monday.

Monday was a nice rebound. It also rests entirely on crude staying calm. Between Xi, the UN, and a possible Iran meeting, there's plenty of chance for the oil charts to firm up. There's just as much chance that they don't, though.

Anders Bylund has positions in Bitcoin and Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Bitcoin, Intel, and Meta Platforms. The Motley Fool has a disclosure policy.