US stocks rally near a record as falling oil prices ease Wall Street's
worries about inflation
[August 04, 2026] By
STAN CHOE
NEW YORK (AP) — The U.S. stock market rallied to the edge of its
all-time high on Monday after easing oil prices helped calm Wall
Street’s worries that inflation could get even worse.
The S&P 500 jumped 1.5% and is just 0.1% below its record set earlier
this summer. It was coming off a frenetic July, where it swung up and
down as oil prices shot higher because of the war with Iran, before
ultimately ending the month just about where it started.
The Dow Jones Industrial Average, which measures a narrower slice of the
U.S. stock market, climbed 693 points, or 1.3%, to an all-time high,
while the Nasdaq composite leaped 2.1%.
Stocks got a lift as the price for a barrel of Brent crude sank 4.7% to
$83.77. It dropped after President Donald Trump said over the weekend
that he decided to hold off on new strikes against Iran at the urging of
allies in the region.
Brent’s price careened between $72 and $102 last month as worries rose
and fell about when the war with Iran would allow oil tankers to freely
exit the Persian Gulf again to deliver crude to customers worldwide. The
latest acquiescence by Trump helped to ease worries about the global
flow of crude, and Treasury yields correspondingly fell in the bond
market.
The yield on the 10-year Treasury sank to 4.68% from 4.75% late Friday.
It, though, remains well above its 3.97% level from before the war with
Iran.
Higher yields threaten to undercut prices for stocks and other
investments, while slowing the economy by making borrowing more
expensive for U.S. households and businesses. The average long-term U.S.
mortgage rate has already leaped to its highest level in a year.
Monday’s ease in oil prices helped airlines and other companies with big
fuel bills lead the market. United Airlines flew 5.8% higher, while
American Airlines climbed 5%. Norwegian Cruise Line Holdings steamed
6.6% higher.
Boeing jumped 8% after U.S. regulators certified its 737 MAX-7 planes,
clearing them for commercial service.
Tyson Foods rose 2.8% after the meat company reported a slightly
stronger profit for the spring than analysts expected. CEO Donnie King
said strength is continuing in the company’s chicken business and its
prepared foods, which include brands like Jimmy Dean and Hillshire Farm.
It joined a lengthening list of big U.S. companies to deliver a bigger
profit for the spring than analysts expected. That’s imperative for Wall
Street because stock prices tend to follow the path of corporate
earnings over the long term, and worries were rising that U.S. stock
prices may have broadly already shot too high.
Companies in the S&P 500 are on track to deliver earnings per share for
the spring that are 47% higher than a year before, according to FactSet,
with more than half of the companies in the index having already
reported. If that ends up being the case, it would be the strongest
growth since the spring of 2021, when the economy was roaring out of the
COVID pandemic.
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A trader works on the floor of the New York Stock Exchange,
Thursday, July 30, 2026, in New York. (AP Photo/Yuki Iwamura)
 Also offering encouragement for
profits was a report on Monday showing that growth for U.S.
manufacturing accelerated to its strongest level since 2022.
Keeping Wall Street unsettled, though, were swings for stocks of
companies that make computer chips. They’ve been veering up and down
for weeks on worries about whether their surging revenues because of
the artificial-intelligence boom are sustainable.
If AI ends up producing less profit and productivity than hoped, Big
Tech companies could curtail their spending sprees on data centers
that have helped chip stocks soar to tremendous heights.
Micron Technology went from a drop of 6.4% to a gain of 1.7% through
the day before ending with a gain of 0.8%, for example. It’s up
roughly 190% for the year so far.
All told, the S&P 500 rose 110.78 points to 7,600.50 and finished
just shy of its all-time closing high of 7,609.78. The Dow Jones
Industrial Average climbed 693.38 to 53,178.41, and the Nasdaq
composite rallied 540.04 to 25,913.90.
The manic swings for AI stocks have been most dramatic in South
Korea, where the Kospi index is dominated by just two tech titans,
Samsung Electronics and SK Hynix.
Seoul’s Kospi fell 5.1% Monday, coming off Friday’s 17.9% surge that
was its best day in history.
In neighboring Japan, Tokyo’s Nikkei 225 fell 0.9% after the United
States and Japan confirmed they had moved together to prop up the
value of the Japanese yen against the dollar. A stronger yen would
help to limit inflation in Japan, but it could also potentially hurt
Japan’s exporters.
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AP Writers Matt Ott, Elaine Kurtenbach, Mayuko Ono and Mari
Yamaguchi contributed to this report.
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