Wall Street kicked off the week on a strong note as a rally in technology and AI-linked stocks pushed the Nasdaq to a record closing high.A sharp rise in chip stocks, easing treasury yields and a drop in crude prices helped lift sentiment, while investors also watched developments around the Middle East and upcoming US-China talks.The Nasdaq rose 2.26% to 27,122.09 points, marking its first record-high close since June 2. The S&P 500 gained 1.49% to 7,764.70 points, ending about 0.4% below its August 13 record-high close. The Dow Jones Industrial Average added 0.71% to 52,048.83 points.
Chipmakers power technology rally
Semiconductor stocks were at the centre of Monday’s gains. Intel jumped 12.2%, while Arm Holdings surged 17%, sending the PHLX semiconductor index 4.3% higher.Advanced Micro Devices gained about 10%, taking its market capitalisation above $1 trillion for the first time.Meta also joined the rally, with its shares climbing 11.4%. The rise came after Wells Fargo increased its price target on the social media company following the recent launch of its Muse AI assistant.The gains came despite safety warnings from leaders of major AI companies a week earlier, which had triggered a global technology selloff. Investors instead pointed to signs that spending on AI continues to expand.
Oil and bond yields provide support
A retreat in both oil prices and Treasury yields added to the positive mood.The benchmark US 10-year Treasury yield slipped below the psychologically important 5% mark. Brent crude futures fell below $100 a barrel and touched their lowest level since September 9 before settling at $100.34 per barrel.The decline in oil prices came amid speculation about a possible breakthrough in Middle East talks at a UN meeting this week. Washington and Tehran had exchanged threats over the weekend, but US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to attend the UN General Assembly in New York this week.“We’ve been kind of programmed to follow the price of oil and the yield on the US 10-year, and if you look at those two things today, they’ve shifted from being headwinds to tailwinds for this market, at least in the near term,” said Art Hogan, chief market strategist at B. Riley Wealth.
Investors still watch Fed moves
The strong session did not remove concerns about interest rates. The US Federal Reserve raised rates last week for the first time in three years as it sought to fight inflation.CME’s FedWatch showed traders saw a 50% chance of another rate hike next month. Markets are also due to hear commentary from at least 10 central bank policymakers this week.Valuations remained another point of focus. The S&P 500 traded at just under 19 times expected earnings last Friday, its lowest valuation since 2023, according to LSEG data. AI-related heavyweights have been responsible for much of the recent rise in earnings expectations.
Greenland stocks jump, Bitcoin rises
Shares of US-listed companies with exposure to Greenland also surged after progress in diplomatic negotiations between the United States and Denmark over Greenland’s status.Greenland Mines tripled in value, while Greenland Energy more than doubled.Bitcoin also climbed more than 6%, reaching a more than seven-month high. The move lifted shares of Coinbase and Strategy.Meanwhile, Paramount Skydance dropped almost 3% after a source told Reuters that the company had reached a settlement with California and 11 other states that were suing to block its $110 billion merger with Warner Bros Discovery.
China-US meeting in focus
Markets are also looking ahead to a Chinese-US summit on Thursday. Discussions could include a possible extension of the trade truce between the two superpowers, the Iran war and regulation of AI.A report said the US had proposed extending the trade truce by six months, while China was seeking a longer extension.Eight of the 11 S&P 500 sector indexes ended the session higher. Communication services led the gains, rising 4.16%, followed by information technology, which advanced 2.4%.Within the S&P 500, advancing stocks outnumbered declining ones by a 1.4-to-one ratio.The S&P 500 recorded seven new highs and 29 new lows, while the Nasdaq posted 64 new highs and 127 new lows.Trading activity remained relatively strong, with 16.5 billion shares changing hands on US exchanges. That compared with an average of 16.2 billion shares over the previous 20 sessions.
