Wall Street Rallies as Trump Signals Diplomatic Openings

U.S. stock markets rallied on Monday, with the Nasdaq Composite reaching an all-time closing high. The surge was driven by gains in artificial intelligence and chip stocks, notably Meta Platforms and AMD, the latter of which achieved a $1 trillion market valuation for the first time. Investors reacted positively to falling energy costs and potential diplomatic breakthroughs.

Donald Trump signaled openness to meeting Iranian President Masoud Pezeshkian during the United Nations General Assembly in New York to discuss the war and oil traffic through the Strait of Hormuz. This optimism contributed to a sharp drop in Brent oil prices, which fell 3.4% to $100.34. Simultaneously, Treasury Secretary Scott Bessent reported successful engagements with Chinese officials ahead of a scheduled state visit by President Xi Jinping from September 23 to 25 to discuss tariffs and AI safety.

Despite the market optimism, geopolitical risks persist. Houthi forces launched attacks on Saudi Arabia and warned of further strikes against Egypt, Turkey, and Pakistan. In Russia, a Moscow oil refinery halted operations following a Ukrainian drone attack.

On the monetary front, the Federal Reserve raised benchmark interest rates to a range of 3.75% to 4%. Federal Reserve officials Austan Goolsbee and Alberto Musalem maintained a hawkish tone, warning that aggressive rate hikes may be necessary if demand-driven inflation prevents a return to the 2% target.