Shares of energy companies rallied as traders rotated back into inflation-related sectors, which had slid last week because of Federal Reserve policy fears.
The energy sector was among those that fell most heavily last week after the Federal Reserve hinted it was preparing to switch course on policy in the coming months.
Despite a shift to a "hawkish" tone, the Fed remains accommodative and that could support bets on "reflation," said Saira Malik, chief investment officer and head of global equities at money manager Nuveen, in a note to clients.
The Energy Select Sector SPDR exchange-traded fund, which tracks the energy industry group of the Standard & Poor's 500, rose by more than 4% Monday, and is up by more than 40% for the year to date. Optimism about a worldwide rebound in fuel consumption and ongoing restraints on production have made the energy sector a stock-market leader in 2021.
Oil futures closed Monday at their highest level in more than 2-and-a-half years, closing just under $74 a barrel.
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(END) Dow Jones Newswires