Reuters - U.S. stocks finished steady on ​Monday, clawing back early losses during a volatile session after U.S. and Israeli air strikes on Iran roiled global markets.
Investors ‌bought the dip with some enthusiasm and a strong bid emerged for AI‑focused shares.

Gains in energy, tech and defense stocks offset losses in other sectors. The Dow Jones Industrial Average, opens new tab fell 0.15% to 48,904.78 points, while the S&P 500, opens new tab gained 0.04% to 6,881.60 points and the Nasdaq Composite, opens new tab gained 0.36%, to 22,748.86 points.

Investor confidence in U.S. markets, and ​optimism about productivity gains tied to artificial intelligence, offset worries about surging oil prices and geopolitical turmoil, said Alex Morris, CEO of F/m ​Investments.

“The overall action in the Middle East does not have a tremendous impact on the average American stock the ⁠way we measure,” said Morris, noting the U.S. market’s heavy concentration in technology.

"I just don't think the average market participant is that moved by the conflict ​until the price of oil gets to $100 a barrel, which would be an emotional trigger."

Coordinated U.S. and Israeli strikes on Iran over the weekend killed ​Tehran's Supreme Leader Ayatollah Ali Khamenei, and sent shockwaves through global markets. Oil prices jumped and most overseas stock indexes closed lower.

Bargain hunting emerged among U.S. investors after the early selloff, showing an expectation that the disruptions from the conflict will be limited.

"Market participants think this is all just temporary and that the problems in the oil patch will disappear," said ​Bill Smead, founder and chairman of Smead Capital Management.

The clash initially boosted defense shares and energy prices and pressured travel and interest‑sensitive sectors. Later, investors ​ran to tech and weighed how long the Middle East conflict could run and what the conflict means for inflation and Federal Reserve policy.

Smead said investors were reverting to familiar, ‌high-performing stocks ⁠like Nvidia, the Magnificent Seven technology stocks and defense sectors.

"When people get scared, they go back to what is comfortable," he said.

Several oil and gas facilities in ​the Middle East stopped production. ⁠U.S. crude prices settled up 6% at $71.23 a barrel after being up twice as much during the session. Brent settled at $77.74 per barrel, up 6.68%.

Defense stocks also got a boost, with the main U.S. defense equity benchmark, the Dow Jones U.S. Defense Index , trading up.

President Donald Trump also told CNN the "big wave" is yet to come, although ⁠some Middle Eastern ​countries were lobbying U.S. allies to persuade a swift end to the war.

AES Corp, opens new tab fell 17.8% ​after a consortium led by BlackRock-owned, opens new tab Global Infrastructure Partners and private equity firm EQT AB, opens new tab agreed to acquire the utilities company for $33.4 billion at a discount to its last close.