Nasdaq reaches record close as AI shares rally

US technology shares powered the Nasdaq to a fresh record close on Monday, with chipmakers and other companies linked to artificial intelligence leading a broad advance. Advanced Micro Devices gained about 10%, taking its market value above $1 trillion for the first time, while Intel and Arm Holdings posted even sharper increases.

The Nasdaq rose 2.26% to 27,122.09, marking its first record closing level since June 2. The S&P 500 added 1.49% to finish at 7,764.70, leaving it roughly 0.4% below its record close from August 13. The Dow Jones Industrial Average was up 0.71%, ending at 52,048.83.

The rally was reported by Devdiscourse.com, citing a syndicated market report. It came as investors reassessed the outlook for AI investment, after warnings from executives at major AI companies had helped drive a worldwide technology selloff a week earlier.

Chipmakers and AI stocks lead the advance

Semiconductor shares were among the strongest performers. Intel jumped 12.2%, while Arm Holdings rose 17%. The PHLX semiconductor index, which tracks leading chip companies, climbed 4.3%.

Meta also made a substantial gain, advancing 11.4%. Wells Fargo raised its valuation target for the social-media company after the launch of its Muse AI assistant. AI-linked companies have played a major role in lifting expectations for corporate earnings, even as investors continue to question whether the sector’s rapid expansion can be sustained.

The market’s valuation had become less demanding after the recent decline. On Friday, the S&P 500 was trading at slightly less than 19 times forecast earnings, according to LSEG data. That was its lowest such valuation since 2023, potentially giving investors more room to return to technology shares when sentiment improved.

Eight of the S&P 500’s 11 industry groups finished higher. Communication services led the sector gains with a 4.16% rise, followed by information technology, which increased 2.4%.

Yields and oil move lower

Falling bond yields also supported the advance. The yield on the US 10-year Treasury note dropped below 5%, retreating from recent highs and reducing one source of pressure on high-growth companies. Lower yields can make future corporate earnings appear more valuable and can improve the appeal of shares relative to bonds.

Oil prices weakened at the same time. Brent crude briefly fell below $100 a barrel, reaching its lowest point since September 9, before settling at $100.34. The decline reflected speculation that diplomatic progress could emerge from Middle East discussions at a United Nations meeting this week.

Tensions between Washington and Tehran continued over the weekend, but US President Donald Trump said he was willing to meet Iranian President Masoud Pezeshkian. Pezeshkian is expected to attend the UN General Assembly in New York. Investors treated the possibility of talks as a reason to reduce some of the risk premium attached to oil prices.

The interest-rate outlook remained a counterweight to the market’s optimism. The Federal Reserve raised rates last week for the first time in three years as it sought to contain inflation. Traders were assigning an even chance to another increase next month, according to CME’s FedWatch measure, while comments from at least 10 central-bank officials were expected during the week.

Global developments add to market movement

Other international developments also influenced US-listed assets. Shares of companies with exposure to Greenland rose after the United States and Denmark made progress in negotiations over the territory’s status. Greenland Mines tripled in value, while Greenland Energy more than doubled.

Bitcoin climbed more than 6% to a level not seen for over seven months. The rise lifted Coinbase and Strategy, companies whose shares are closely associated with cryptocurrency markets and investor appetite for risk.

A planned meeting between Chinese and US leaders on Thursday could address several issues, including the future of the countries’ trade truce, the conflict involving Iran and rules governing artificial intelligence. One report said the United States had suggested extending the truce for six months, while China wanted a longer arrangement.

Paramount Skydance declined almost 3%. The move followed a report that the company had settled with California and 11 other states that were challenging its proposed $110 billion merger with Warner Bros Discovery.

Market breadth was positive but not overwhelming. Advancing S&P 500 stocks outnumbered decliners by 1.4 to one. The index recorded seven new highs and 29 new lows, while the Nasdaq posted 64 new highs and 127 new lows. Trading volume reached 16.5 billion shares, slightly above the 20-session average of 16.2 billion.