Here's a funny thing about markets: sometimes they just decide not to care. On Monday, Wall Street opened higher and stayed there, brushing aside news of escalating military action in the Middle East like it was just another headline. The major indices all finished in the green, with the tech-heavy Invesco QQQ Trust (QQQ) up 0.28% and small caps, as tracked by the iShares Russell 2000 ETF (IWM), doing even better with a 0.5% gain.

It was a classic case of "buy the sectors that benefit, sell the ones that don't." And investors executed that playbook with precision.

The day's narrative was set by geopolitics. At a White House briefing, President Donald Trump framed "Operation Epic Fury" as a decisive campaign targeting Iran's military and nuclear capabilities, suggesting a timeline of four to five weeks but leaving the door open for a longer engagement. The market's immediate reaction wasn't panic; it was sector rotation.

Defense was the clear winner. The SPDR S&P Aerospace & Defense ETF (XAR) climbed 2%, making it the top-performing industry group. Within that, data analytics firm Palantir Technologies Inc. (PLTR) stood out, rallying 6.5% to become the best performer in the S&P 500 for the session.

Over in commodities, oil was the story. Crude rallied 5.1% to settle around $70 a barrel, pulling back only slightly from an overnight spike that briefly touched $75. That surge powered the energy sector to a 1.3% gain, with Marathon Petroleum Corp. (MPC) leading the charge with a 4.5% advance.

On the flip side, anything linked to discretionary travel and global mobility got hammered. The U.S. Global Jets ETF (JETS) fell 2.2%. Cruise lines were in particularly rough seas: Norwegian Cruise Line Holdings Ltd. (NCLH) plummeted 9%, its worst day since November. Carnival Corp. (CCL) wasn't far behind, down 7%, and Royal Caribbean Cruises Ltd. (RCL) declined 3.6%.

Beyond equities, other markets were moving. Treasury markets saw heavy selling, pushing the yield on the 10-year note up 11 basis points to 4.07%—the biggest one-day jump since a tariff-related shock back in April. The U.S. dollar strengthened by 0.9%. In the crypto world, Bitcoin (BTC) rallied 5.2% to $69,150. Precious metals had a mixed day: gold rose 0.5% to $5,300 an ounce, but silver sank 6% to $88.

How The Major Index ETFs Fared

For a snapshot of the broader market's mood, here’s how the major index-tracking ETFs performed:

• The Vanguard S&P 500 ETF (VOO) rose 0.1% to $631.96.
• The SPDR Dow Jones Industrial Average ETF (DIA) was essentially flat, up 0.0% to $489.83.
• The tech-heavy Invesco QQQ Trust (QQQ) gained 0.28% to $609.02.
• The small-cap focused iShares Russell 2000 ETF (IWM) traded 0.5% higher to $264.56.

The Day's Biggest Stock Movers

Drilling down into individual names, the Russell 1000 index had some dramatic swings. The top gainers weren't all war-related plays, showing there were other stories in the market.

Top 5 Gainers in the Russell 1000:

• Figure Technology Solutions, Inc. (FIGR): +17.58%
• Coherent Corp. (COHR): +14.25%
• Circle Internet Group, Inc. (CRCL): +12.89%
• Lumentum Holdings Inc. (LITE): +9.73%
• AAON, Inc. (AAON): +8.20%

Top 5 Losers in the Russell 1000:

• The AES Corporation (AES): -17.33%
• ADT Inc. (ADT): -10.91%
• Norwegian Cruise Line Holdings Ltd. (NCLH): -9.22%
• e.l.f. Beauty, Inc. (ELF): -9.10%
• Elevance Health, Inc. (ELV): -8.52%

So, what's the takeaway? Monday was a lesson in selective pricing of risk. The market absorbed the geopolitical news and then made very specific bets: defense contractors and oil companies are in favor; companies that depend on people feeling safe enough to travel are not. For now, at least, the broader market seems willing to look past the headlines and focus on the sector-level implications.