The S&P 500 and Nasdaq ended sharply higher on Monday, lifted by gains in Advanced Micro Devices and other AI heavyweights, while Treasury yields retreated from recent highs and crude prices tumbled to an 11-day low on speculation about a potential breakthrough in Middle East talks at a UN meeting this week. Chip stocks rallied, with Intel INTC.O INTC.O and Arm Holdings ARM.O both surging. Advanced Micro Devices AMD.O AMD.O reached a market capitalization of $1 trillion for the first time. Investors pointed to signs that suggest spending on AI is still expanding, despite recent safety warnings from leaders of AI giants a week ago that triggered a global tech selloff.
The benchmark US 10-year yield fell below the psychologically important 5% level as Brent crude futures LCOc1 dipped below $100 a barrel to their lowest level since September 9, later settling at $100.34 per barrel. While Washington and Tehran exchanged threats through the weekend, the US President 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.
Meta META.O META.O shares soared after Wells Fargo hiked its price target on the social media platform following the recent launch of its Muse AI assistant.
According to preliminary data, the S&P 500 .SPX .SPX gained 113.72 points, or 1.49%, to end at 7,764.22 points, while the Nasdaq Composite .IXIC .IXIC gained 599.55 points, or 2.26%, to 27,122.09. The Dow Jones Industrial Average .DJI .DJI rose 371.24 points, or 0.72%, to 52,053.88. The S&P 500 last Friday traded at just under 19 times expected earnings, its lowest valuation since 2023, according to LSEG data. AI-related heavyweights are responsible for much of the recent increase in earnings expectations.
Investors remained wary of the interest-rate outlook after the US Federal Reserve last week raised rates for the first time in three years to fight inflation. Traders see a 50% chance of another hike next month, CME’s FedWatch showed. Commentary from at least 10 central bank policymakers is due this week.
US-listed shares of companies exposed to Greenland rose following progress in diplomatic negotiations between the United States and Denmark about the status of Greenland. Greenland Mines GRML.O GRML.O tripled in value, while Greenland Energy GLND.O GLND.O more than doubled.
A Chinese-US summit on Thursday could cover topics including potentially extending the trade truce between the two superpowers, the Iran war and regulation of AI. A report said the US proposed to extend the trade truce by six months, while China sought a longer extension. Bitcoin BTC=, a key marker of risk tolerance, rose sharply to a more than seven-month high, lifting Coinbase COIN.O COIN.O and Strategy MSTR.O MSTR.O .
Paramount Skydance PSKY.O PSKY.O fell after a source told Reuters the company had reached a settlement with California and 11 other states suing to block its $110 billion merger with Warner Bros Discovery WBD.O WBD.O.
Reporing by Johann M Cherian and Tharuniyaa Lakshmi in Bengaluru, and by Noel Randewich in San Francisco; Editing by Pooja Desai and Matthew Lewis.
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