Stocks closed higher yesterday, reversing sharp intraday losses to close with sharp gains by day's end.

The tech-heavy Nasdaq was the biggest gainer adding 1.38%, as tech and AI-related names led the rally.

And what a reversal it was.

Plus, crude oil, which surged to 4-year highs earlier, ended up closing lower.

In Sunday futures trading, crude oil surged by more than 25%. In yesterday's regular session, it was 'only' up about 10% intraday. But by day's end, it was down by roughly -3%.

Helping to tamp down energy prices yesterday was an emergency G7 meeting where they discussed releasing oil from each country's strategic petroleum reserves and IEA stockpiles. There was broad agreement to not release them yet, but they did agree that they are "ready to take necessary measures," to release oil reserves if needed.

Additionally, European allies suggested they too might escort tankers through the Strait of Hormuz, similar to what the U.S. said last week.

President Trump's comments also appeared to ease concerns about the length of the conflict, telling CBS News that the campaign against Iran is "very far ahead of schedule," and that "I think the war is very complete, pretty much." He added, "they have no navy, no communications, they've got no air force. Their missiles are down to a scatter." "There's nothing left in a military sense."

Not much in the way of economic reports yesterday. But today well get the NFIB Small Business Optimism Index, and Existing Home Sales.

Later in the week, we'll get a few more important reports. Tomorrow (Wednesday), we'll get another look at inflation with the Consumer Price Index (CPI), retail inflation report. Then on Friday, we'll get the Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge. And we'll get the second estimate for Q4'25 GDP.

In the meantime, the market will continue to digest last week's reports which showed a disappointing Employment report (down -92,000 jobs), but a strong Productivity report (Q4'25 showed nonfarm business productivity rising at a 2.8% annual rate, well above expectations for 1.9%, while also raising Q3's rate up to 5.2% from the originally stated 4.9%, making it the strongest quarterly gain in 5 years).

What's noteworthy is that productivity growth typically slows in the late stages of expansion, but gains at the beginning of a new growth phase. And that's why people are comparing it to the 1990's.

Productivity jumped back then due to the technology gains from the internet boom. And we could be seeing the same thing now thanks to the technology gains due to the AI boom.

The tech boom back then, driven by the internet and dot-com companies, saw the market surge by double-digits each year, for 5 long years (1995-1999).

Today's AI tech boom has already seen three years in a row of double-digit gains. And I'm expecting at least 2 more years of double-digit gains, as the AI boom is still in its early stages.

And the above-trend productivity gains, which are mirroring the late 1990's during the tech-boom, are another marker for potentially big growth ahead ? for the economy and the market.

See you tomorrow,