Global Markets Rally as Oil Holds Below $90 and Dollar Retreats

Global equities posted solid gains on Monday, driven by a retreat in crude oil prices and a softer U.S. dollar. Brent crude settled at $88.70 per barrel, below the $90 threshold that had been a key psychological barrier, while West Texas Intermediate (CL=F) traded at $85.40. The decline in energy costs eased inflation concerns and boosted corporate margin expectations, particularly for energy-intensive sectors. The U.S. dollar index (^DXY) fell 0.7% to 103.21, marking its lowest level since late February. A weaker dollar typically benefits multinational corporations by enhancing overseas earnings when converted back to USD, and it also supports export-driven industries. The Federal Reserve’s cautious stance on rate cuts, combined with softer-than-expected inflation data, contributed to the dollar’s retreat. Technology stocks led the rally, with Apple (AAPL) climbing 2.3% to close at $194.60. The Nasdaq Composite rose 1.4%, while the S&P 500 gained 1.1%. The volatility index (^VIX) dropped to 14.8, its lowest level in three weeks, reflecting reduced market anxiety. Defense sector stocks also advanced, supported by renewed geopolitical tensions and increased defense spending in several NATO countries. The rally extended beyond U.S. borders, with European indices—FTSE 100, DAX, and CAC 40—posting gains of 0.9% to 1.3%. Asian markets, including Japan’s Nikkei 225 and China’s Shanghai Composite, also rose modestly, driven by optimism over China’s stimulus measures and improved manufacturing data.