Oil Stocks Surge Amid Global Tensions, Summer Demand

Major U.S. equities indexes were mixed to kick off a trading week that will provide several key economic data points.

Later in the week, investors will get a look at the latest revision to first-quarter economic growth figures. It will be followed on Friday by the Personal Consumption Expenditure (PCE) data from May—a measure of inflation monitored closely by Federal Reserve policymakers as they consider interest rate policy.

The S&P 500 slipped 0.3% on Monday. The Nasdaq fell 1.1%, dragged down by underperformance from the tech sector. Meanwhile, strength in energy and financials helped boost the Dow, which closed the session 0.7% higher.

ResMed (RMD) shares plunged 11.5%, suffering the steepest losses of any S&P 500 component, after a clinical trial showed that Eli Lilly’s (LLY) weight-loss drug Zepbound reduced the severity of sleep apnea among obese patients without requiring the use of a sleep apnea mask. The masks make up a significant portion of ResMed’s sales. Lilly shares ticked 0.7% higher on Monday.

Technology stocks that have surged in 2024 based on lofty expectations for artificial intelligence (AI) showed signs of cooling late last week, and the downturn continued Monday. Shares of high-performance server and data storage provider Super Micro Computer (SMCI) dropped 8.7%, while shares of AI semiconductor behemoth Nvidia (NVDA) fell 6.7%. Shares of fellow chipmaker Qualcomm (QCOM) lost 5.5%.

Shares of Mosaic Co. (MOS), which provides potash, phosphate, and urea for agricultural fertilizers, notched the day’s top performance of any S&P 500 stock, jumping 4.6%. A report published last week by Zacks Equity Research noted Mosaic is poised to benefit from strong phosphate and potash demand as the nutrients become more affordable for farmers. The report also highlights the firm’s initiatives to cut costs in response to challenging operating conditions.

Crude oil futures prices moved higher amid increasing geopolitical tensions in the Middle East and growing demand for gasoline in the U.S., underpinning a strong day for stocks in the oil and gas industry. Shares of oilfield services giant Baker Hughes (BKR) added 4.5%, while shares of hydrocarbon exploration firm APA Corp. (APA) also added 4.5%. Shares of natural gas company EQT Corp. (EQT) were up 4.2%.

Additional peers in the oil and gas industry dominated the list of the top performers in the S&P 500.