U.S. Stocks Rise as Nasdaq Leads AI Rally
U.S. Stocks Rise as Nasdaq Leads AI Rally
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Key Points
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The 10-year U.S. Treasury yield fell below 5%, while lower borrowing costs also lifted bank shares; Citi gained 1.5%.
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AI-related stocks posted some of the session’s strongest gains: Intel, AMD, Seagate, Marvell and Western Digital rose between 3% and 5%, while Meta gained more than 2.5% following positive reactions to its Muse AI agent.
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The Russell 2000, a measure of smaller U.S.-listed companies, rose 0.41% to 2,872.21, indicating that gains extended beyond the largest technology and blue-chip stocks.
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The rally followed a difficult prior week: the Dow had fallen 1.7%, marking its third consecutive weekly decline and its sharpest weekly drop in the period described.
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The S&P 500 had risen about 27.6% from the start of President Donald Trump’s second term through the prior Friday, according to Axios reporting cited by MK, while the Nasdaq had gained 35.1% over the same period.
U.S. stocks climbed Monday as technology shares powered a broad rally, with the Nasdaq hitting record highs. MarketWatch reported that falling oil prices—driven by hopes of resumed U.S.-Iran negotiations—eased inflation concerns and helped push the 10-year Treasury yield below 5%. Chip stocks like Intel, AMD, and Seagate surged between 3% and 5%, while artificial-intelligence optimism lifted Meta and other tech giants.
The rebound extends recent gains after a tough prior week. Axios data cited by Morning Star shows the S&P 500 has risen 27.6% since President Trump's second term began, while the Nasdaq surged 35.1% over the same span. Lower borrowing costs also helped banks: Citi jumped 1.5% as Treasury yields fell.
AI Bets and Chip Stocks Lead the Charge
Technology and semiconductor stocks dominated Monday's gains. Intel, AMD, Marvell, Seagate, and Western Digital each rose 3% to 5%, as investors bet big on artificial intelligence. MarketWatch noted that Meta jumped more than 2.5% after positive reactions to its new Muse AI agent. The surge reflects Wall Street's continued hunger for AI-related companies.
The rally wasn't limited to mega-cap stocks. The Russell 2000, which tracks smaller U.S. companies, rose 0.41% to 2,872.21. This breadth suggests confidence is spreading beyond just the largest tech firms. Lower Treasury yields—which reduce borrowing costs—also lifted bank shares and signaled relief across multiple sectors.
Oil Prices Drop on Hopes of Iran Talks
Crude oil futures fell Monday on renewed optimism about U.S.-Iran diplomatic efforts resuming. WSJ reported that the decline in oil prices fueled a relief rally for high-risk technology stocks. Energy shares, by contrast, came under pressure as investors shifted away from traditional commodities and toward growth-focused bets.
The geopolitical thaw matters because oil is a bellwether for inflation risk. When prices fall, the Federal Reserve faces less pressure to keep interest rates high. That helps tech stocks, which rely on low discount rates to justify their valuations. Investors are also watching for a planned Trump-Xi meeting where trade, critical minerals, and AI will likely dominate talks.
Nasdaq Rebounds From Its Sharpest Weekly Decline
Monday's gains follow a brutal prior week. The Dow fell 1.7%, marking its third straight weekly loss and its steepest drop in the period. The Australian reported the Nasdaq posted a fresh record high Monday, reversing course after the weakness. Tech investors are now back in buying mode after profit-taking last week.
The bounce-back shows the market remains confident about the long-term outlook. Since Trump's second term began, the Nasdaq has climbed 35.1%—far outpacing the S&P 500's 27.6% gain. Monday's rally signals that any weakness is being treated as a buying opportunity by investors banking on AI and lower borrowing costs.
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