U.S. stock indexes rallied Monday as falling oil prices helped to calm Wall Street's concerns about escalating inflation. The S&P 500 rose 1.5% after a volatile July, while the Dow Jones Industrial Average gained 591 points, or 1.1%, and the Nasdaq composite climbed 2.2%.

The market received a boost as the price of Brent crude oil sank 5% to $83.49. This decline followed President Donald Trump's announcement that he would hold off on new strikes against Iran, a decision influenced by appeals from regional allies. The price of Brent crude had fluctuated significantly in July, moving between $72 and $102, influenced by concerns over potential disruptions to oil tanker traffic in the Persian Gulf due to the conflict with Iran. The recent de-escalation has eased worries about the global crude supply, leading to a corresponding drop in Treasury yields.

The yield on the 10-year Treasury note fell to 4.69% from 4.75% late Friday, though it remains above its pre-conflict level of 3.97%. Higher Treasury yields can depress stock prices and slow economic activity by increasing borrowing costs for consumers and businesses. The average long-term U.S. mortgage rate has already reached its highest point in a year.

Sectors sensitive to fuel costs, such as airlines, saw significant gains. United Airlines' stock increased by 5.2%, American Airlines climbed 4.2%, and Norwegian Cruise Line Holdings rose 3.9%.

Tyson Foods reported a stronger-than-expected profit for the spring quarter, with shares rising 2%. CEO Donnie King noted continued strength in the company's chicken and prepared foods businesses. This performance aligns with a broader trend of U.S. companies exceeding analyst profit expectations for the spring season. According to FactSet, companies in the S&P 500 are on track to report earnings per share growth of 47% compared to the previous year, the strongest growth since the spring of 2021. Further supporting corporate profits, a report indicated that U.S. manufacturing growth accelerated to its highest level since 2022.

Despite the positive indicators, volatility persisted in the stocks of semiconductor companies. These companies have experienced significant price swings in recent weeks due to uncertainty surrounding the sustainability of their revenues, which have surged amid the artificial intelligence boom. Concerns remain that if AI generates less profit and productivity than anticipated, major technology firms might reduce their investments in data centers, a key driver of recent gains in chip stocks.

For example, Micron Technology's stock fluctuated dramatically during early trading on Monday, moving from a 6.4% drop to a 0.7% gain. Despite this, its stock is still up approximately 190% year-to-date.

In international markets, South Korea's Kospi index, heavily influenced by tech giants Samsung Electronics and SK Hynix, fell 5.1% on Monday, following a 17.9% surge on Friday. Meanwhile, Japan's Nikkei 225 declined 0.9% after the U.S. and Japan confirmed coordinated efforts to support the Japanese yen against the dollar. A stronger yen could help curb inflation in Japan but might negatively impact the country's exporters.