US open: Stocks shrug off geopolitical concerns ahead of Yellen Q&A
US stocks climbed higher on Monday as Wall Street shrugged of rising US and Russian tensions after last week's missile strikes on Syria, as investors looked ahead to comments by Federal Reserve chair Janet Yellen.
At 1553 BST, Dow Jones Industrial was up 0.4% to 20,739.07, the S&P 500 rose 0.37% to 2,364.19, and the Nasdaq added 0.38% to 5,899.88.
Meanwhile, oil prices rallied following another shutdown at Libya's Sharara oilfield and growing concerns over Syria after the US missile strike.
West Texas Intermediate was up 1.11% to $52.83 a barrel and Brent crude was 0.91% firmer at $55.75.
In currency markets, the dollar was down 0.38% against the pound to 0.8052, flat against the euro at 0.9436, and unchanged versus the yen at 111.19.
Stocks were on the front foot despite geopolitical tension remaining high, after Russian president Vladimir Putin said the US had crossed a "red line" with its missile strikes on Syria last week, which US president Donald Trump had said was in response to a chemical attack on civilians by the Syrian government.
Naeem Aslam, chief market analyst at ThinkMarkets, said that geopolitical concerns were still on investors’ minds as it would be “naive to ignore the political drama taking place in Europe” and the Middle East.
A special session of the Group of 7 industrialised nations in Lucca, Italy, will also be in focus, with foreign ministers set to discuss the situation in Syria.
Elsewhere, investors were looking ahead to comments by Yellen after the Fed minutes released last week revealed that the central bank was planning to wind down its $4.5trn balance sheet.
“The Fed intends to announce the plan well in advance of its implementation and will reduce its security holdings in a gradual, predictable manner, primarily by redeeming principal repayments rather than by selling securities in the market”, analysts at Daiwa Capital Markets said.
“Balance sheet adjustments will not be used as an active tool of monetary policy, although reductions in security holdings in some circumstances might substitute for a rate hike, and quantitative easing could be used if short-term interest rates return to the zero lower bound. Ultimately, the Fed hopes to hold a portfolio consisting primarily of Treasury securities in order to limit its effect on the allocation of credit to various sectors of the economy.”
Yellen is due to take part in a Q&A session at the University of Michigan at 2120 BST.
In corporate news, Swift Transportation soared 24.38% on news that the trucking company is to merge with rival Knight Transportation - which was up 14.44% - in a deal worth $6bn.
Delta Air Lines slipped 0.31% after a string of cancellations and delays.
Mondelez International was 0.66% higher following reports it is set to look for a successor to chief executive officer Irene Rosenfeld.
Software company Okta Inc fell 0.77% after its shares surged in their Nasdaq debut on Friday.