US stocks recover from Friday's sell-off, Dow jumps 343 points amid Mideast jitters

President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu the United States would not participate in a counter-offensive against Iran - an option Netanyahu's war cabinet favors after a mass drone and missile attack on Israeli territory - according to officials familiar with the development.

Iran launched the attack after a suspected Israeli strike on its embassy compound in Syria on April 1 that killed top Revolutionary Guards commanders. However, Iran's attack, launched using more than 300 missiles and drones, caused only modest damage in Israel.

Defense stocks like Lockheed Martin, General Dynamics and RTX Corp gained between 1.1% and 1.5%.

On the earnings front, Goldman Sachs gained 5.1% after its first-quarter profit beat Wall Street estimates as a recovery in underwriting and dealmaking boosted its investment banking unit, helping it post the highest earnings per share since 2021.

The stock lifted the financial sector up 1.5%, helping it to lead sectoral gains.

Meanwhile, U.S. retail sales rose 0.7% in March, compared to a 0.3% rise estimated by economists polled by Reuters.

"Certainly we're at a place in time this week where the economic data in large part will take a backseat to the earnings reports," said Art Hogan, chief market strategist at B Riley Wealth.

"But as it pertains to the retail sales, good news is good news. We're in that place that better news in terms of economic growth is certainly going to be a positive for markets now."

U.S. equities have sold off recently as investors sharply readjusted their expectations of how much the Fed would cut rates this year. Traders have priced in only 39 basis points of cuts this year, according to LSEG data, down from about 150 bps at the start of the year.

At 9:37 a.m. ET, the Industrial Average was up 342.51 points, or 0.90%, at 38,325.75, the S&P 500 was up 36.24 points, or 0.71%, at 5,159.65, and the Composite was up 69.03 points, or 0.43%, at 16,244.12.

Most megacap growth stocks edged higher in early trading. However, Apple fell 0.9% after data from research firm IDC showed the company's smartphone shipments dropped about 10% in the first quarter of 2024.

Tesla will lay off more than 10% of its global workforce, an internal memo seen by Reuters showed. Shares of the EV maker were last down 2.0%.

Salesforce dipped 3.8% after Reuters reported, citing a source, that the customer relations software maker was in advanced talks to acquire Informatica.

Advancing issues outnumbered decliners by a 2.97-to-1 ratio on the NYSE and by a 1.61-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and no new lows, while the Nasdaq recorded 19 new highs and 70 new lows.