Wall Street rallies more than 2% as oil slides on Iran hopes; Nvidia lags

• US: The S&P 500 ended the regular session up 2.35% at 7,549.94, the Nasdaq up 2.74% at 25,253.14 and the Dow up 2.15% at 52,389.75. S&P futures are holding a 2.34% gain after the bell. Even so, the S&P remains 3.76% below its 52-week high and is still slightly down over five sessions.
• Europe: The FTSE 100 closed 1.02% higher at 10,782.87, the DAX 1.73% higher at 26,267.19 and the Euro Stoxx 50 1.94% higher. The FTSE and DAX both finished within 2% of their 52-week highs.
• Asia: Asia closed before the US rally and still shows the damage from last week. The Kospi finished at 5,018.85 and is down 11.15% over five sessions. The Nikkei is 5.49% lower over the same period.

The main driver was oil. Brent fell 5.97% to $92.45 and WTI 4.56% to $86.69 after President Trump said fresh US strikes on Iran were unlikely, which raised hopes of a deal with Tehran. Cheaper crude eases fears of a renewed jump in inflation. That matters more than usual now, because markets still put the odds of a Federal Reserve rate rise in December above 80% after a strong October jobs report. Treasuries did not join in: the 10-year yield finished broadly flat at 4.864%. Lower energy costs helped equities, but bond traders were not ready to bet that the Fed would back off.

The second driver was a rebound in the AI trade that broke last week. Democrats' sweeping midterm win had raised fears of tougher regulation and slower data-centre spending. Several large brokers called the sell-off overdone, and chip stocks bounced hard: the Philadelphia semiconductor index rose 6.9% and AMD 13.26% after an upgrade.

Nvidia was the exception and fell about 4%. Jensen Huang has admitted to an affair, and the board has opened an independent investigation into reports that a Chinese intelligence operation targeted him. The board says it has no reason to think company secrets were compromised. Analysts are focused on the risk of depending on one person: Huang co-founded the company and has no named successor. In London, miners led the FTSE as copper rose 2.52% and gold climbed.

The VIX fell 22.31% to 19.92 and the MOVE index of bond volatility fell 7.32% to 85.98, so stress eased in both stocks and bonds. The rally was broad: on PrimerIQ's count, 4,679 US listings rose against 1,438 that fell, and all 11 sector ETFs gained. Industrials (+3.82%) and technology (+3.73%) led, with energy (+0.52%) last as oil fell. Not every signal was risk-on. Gold rose 1.82% to $4,149, so some demand for safe havens remains, while the dollar index slipped 0.6%. Our Asian breadth was roughly even, with 6,203 risers against 5,980 fallers.

Monday's only notable US release was wholesale trade, which did not move markets. Richmond Fed President Tom Barkin said policymakers should act with care as they respond to inflation, which was not a signal either way on December. No more scheduled data is due today. October consumer prices are due on Tuesday at 08:30 ET, with consensus at 0.3% month on month and 0.2% for the core measure, after 0.6% in September. Producer prices follow on Friday.

Constellation Energy earned $5.06 a share against a $3.89 consensus, and its shares rose more than 10%. KKR also beat. After the close, Take-Two reported a $0.29 loss per share, bookings below forecasts and guidance short of estimates, yet its shares rose about 3% after hours. The company confirmed the 19 November launch date for GTA VI and said pre-orders are at 'unprecedented levels'. Rocket Lab's revenue beat forecasts, but a wider loss and guidance for a larger EBITDA loss sent its shares lower after hours.