Oil and gas stocks rise, renewables lose momentum

Major U.S. stock indexes rose to start a new trading week that will include earnings reports from major financial institutions and several other major companies, including video streaming giant Netflix (NFLX) and health insurer UnitedHealth (UNH).

Monday’s stock market rally came after Federal Reserve Chairman Jerome Powell sounded optimistic about recent signs of a slowdown in inflation during a speech at the Economic Club of Washington.

The session coincided with the opening day of the Republican National Convention, where investors were assessing the possible market implications of Saturday’s assassination attempt on GOP presidential candidate Donald Trump and the announcement of Ohio Sen. J.D. Vance as the party’s vice presidential candidate.

The S&P 500 rose 0.3%, ending the day just a few points below the record close printed by the benchmark index on Wednesday. The Dow gained 0.5%, setting a record closing high for the first time since May 17. The tech-heavy Nasdaq rose 0.4%.

Weekend political violence helped shape the market’s performance Monday, boosting security stocks as well as companies that could benefit from a second Trump administration. Shares of Axon Enterprise (AXON), maker of the Taser and other law enforcement devices, rose 5.5%, the S&P 500’s best daily performer.

Shares of cloud-based human resources management software provider Paycom Software (PAYC) rose 5.2% on positive comments from Zacks Equity Research. Analysts called Paycom an attractive pick for value investors, highlighting its dividend payouts and lack of debt, and indicated the company could be poised to beat estimates when it reports quarterly results on July 31.

Energy was the best-performing sector Monday amid a higher probability of a Trump victory in the election, which raised expectations that favorable policies could be on the horizon for oil and gas players. Shares of oil exploration company APA Corp. (APA), which is strategically cutting production as it navigates a tough pricing environment, rose 5%. Shares of oilfield services companies also posted significant gains.

Increased confidence in Trump retaking the White House helped lift some energy companies, although the changing political landscape has put pressure on renewable energy companies, and a shift to clean energy is unlikely to be a priority under the new Republican administration. Shares of energy company AES Corp. (AES) fell 10%, the biggest loss of any S&P 500 stock on Monday.

In addition to the unfavorable political outlook for renewables, losses were spread across the solar industry after Israeli company SolarEdge Technologies (SEDG) announced it would lay off 400 workers in response to rising stocks and a slowdown in European solar markets. SolarEdge shares fell 15%, while shares of U.S. solar panel maker FirstSolar (FSLR) fell 8.5%.

Shares of luxury lifestyle company Ralph Lauren (RL) fell 5.8%. While the clothing designer is focused on growing digital and direct-to-consumer sales, the company is facing macroeconomic challenges and higher operating costs.