Wall Street Rallies to Start the Year as Energy and Bank Stocks Lead Broad Gains

BY EMMANUEL OGBONNA

U.S. stocks climbed sharply in afternoon trading Monday, extending momentum into the first full week of the new year as investors pushed major indexes closer to record territory. Gains were led by energy companies and large banks, with markets responding to rising oil prices, geopolitical developments and continued confidence in the economic outlook.

The S&P 500 rose 0.6%, hovering just below its all-time high. The Dow Jones Industrial Average jumped 691 points, or 1.4%, by midafternoon, while the Nasdaq composite also added 0.6%. The advance followed a generally positive session across global markets, with most indexes in Asia and Europe finishing higher earlier in the day.

Energy stocks were among the strongest performers as oil prices moved higher after U.S. forces captured Venezuelan President Nicolás Maduro during a weekend operation. The geopolitical shock focused investor attention on global energy supplies and the future of Venezuela’s oil industry. U.S. crude oil rose 1.7% to $58.32 a barrel, while Brent crude, the international benchmark, gained 1.7% to $61.76 a barrel.

Shares of major U.S. oil producers surged amid speculation that American companies could play a role in reviving Venezuela’s long-neglected energy sector. President Donald Trump has suggested that U.S. oil firms could help rebuild the country’s industry, which has deteriorated after years of sanctions, underinvestment and mismanagement. Chevron jumped 5.6%, Exxon Mobil rose 2.3%, and ConocoPhillips gained 3.4%, making them some of the biggest contributors to the market’s advance.

Analysts note that Venezuela’s oil infrastructure is in poor condition and would require years of investment to significantly boost output. Still, some believe production, currently estimated at about 1.1 million barrels per day, could double or even triple in a relatively short period if sanctions are eased and capital flows return.

Banks also delivered solid gains, reflecting optimism about earnings and the broader economy. JPMorgan Chase climbed 3%, while Bank of America rose 1.9%, adding to the Dow’s strong performance.

Technology stocks were mixed as investors turned their attention to the industry’s annual CES trade show in Las Vegas, where companies are unveiling new products and innovations. Nvidia slipped 1.1%, while Intel edged up 0.1%. The sector remains under close scrutiny as investors assess the pace of development in artificial intelligence, which was a major driver of market gains last year.

Artificial intelligence has played an outsized role in lifting technology stocks and major indexes, with expectations that the technology will boost productivity and profits across a wide range of industries. Heavy investment by companies such as Nvidia has helped push valuations to lofty levels, making a small group of influential firms responsible for a large share of market movements. Updates from CES are being watched closely for signs that the enormous spending on AI infrastructure will translate into sustained growth.

Market strategists say the broader rally reflects confidence that last year’s strength can carry into the new year. Mark Hackett, chief market strategist at Nationwide, said steady gains and the lack of panic selling point to a healthy start. He described the market’s upward trend as broad-based and consistent, suggesting investors remain comfortable with risk.

In other markets, demand for traditional safe-haven assets rose alongside stocks. Gold climbed 2.8%, while silver surged 7.9%, continuing a strong run that has pushed precious metals to record levels over the past year amid ongoing geopolitical tensions and trade disputes.

Bond prices rose, sending Treasury yields lower. The yield on the 10-year Treasury note slipped to 4.16% from 4.19% late Friday, while the two-year yield, which more closely tracks expectations for Federal Reserve policy, eased to 3.46% from 3.48%.

Investors are also preparing for a busy week of economic data that could influence the Federal Reserve’s next moves on interest rates. A report released Monday showed U.S. manufacturing activity remained in contraction territory in December. More attention will be focused on the services sector report due Wednesday, as services account for the majority of U.S. economic activity and showed modest growth through most of last year.

Later in the week, updates on job openings and overall employment will provide further insight into the health of the labor market. The Fed has been balancing signs of a cooling job market against persistent inflation as it considers whether to cut rates. After lowering its benchmark rate three times late last year, policymakers have grown more cautious, with inflation still running above the central bank’s 2% target.

Despite that caution, expectations on Wall Street remain that the Fed will keep rates unchanged at its meeting later this month, a view that has helped support the market’s strong start to the year.