US stocks rallied on Monday, as a drop in oil prices tempered inflation fears and helped the S&P 500 rebound from its biggest weekly drop since April 2025, and tech shares jumped even as AI heavyweight Nvidia slumped with controversy swirling around CEO Jensen Huang. Last week, stocks slumped after a sweeping victory by Democrats in the US midterm elections fed concerns that new regulations could dent the durability of the AI trade.
Nine of the 11 major S&P 500 sector indexes saw gains of more than 1% on Monday. Industrials .SPLRCI .SPLRCI and consumer discretionary .SPLRCD .SPLRCD were the top performers, rising about 4% each. Markets were in rally mode even as Nvidia NVDA.O NVDA.O , the second most valuable company in the world, tumbled and hit its lowest intraday level since March 31. Investors questioned CEO Huang’s future at the AI chipmaker after an internal investigation into whether a foreign intelligence effort had targeted him.
Providing further support was a sharp drop in crude oil prices that helped dampen concerns about price pressures, as US President Donald Trump downplayed the likelihood of renewed strikes on Iran.
According to preliminary data, the S&P 500 .SPX .SPX gained 172.97 points, or 2.34%, to end at 7,549.83 points, while the Nasdaq Composite .IXIC .IXIC gained 671.13 points, or 2.73%, to 25,250.55. The Dow Jones Industrial Average .DJI .DJI rose 1,104.20 points, or 2.16%, to 52,394.36.
Inflation readings are on the docket this week as the Labor Department will release its Consumer Price Index report for October on Tuesday and Producer Price Index on Friday. Some analysts on Wall Street also viewed last week’s decline as an overreaction. Morgan Stanley and UBS said last week’s rout in AI stocks was overdone, and risks were low of extreme regulation of data center developments, even with Democratic majorities the US Congress.
Even as oil prices have eased, expectations for a rate hike at the Federal Reserve’s December policy meeting remain above 80%, according to CME FedWatch, as October’s strong jobs report gave the central bank latitude to continue raising rates. On Monday, Richmond Federal Reserve President Tom Barkin said the Fed should move its monetary policy “with care” as it maps a response to inflation.
Chipmakers surged. The Philadelphia Semiconductor Index .SOX .SOX shot up about 7% after plunging more than 12% last week, its biggest weekly drop since the week ended April 4, 2025. Nvidia was the sole decliner in the index on Monday, while Broadcom AVGO.O AVGO.O and Advanced Micro Devices AMD.O AMD.O were the two biggest boosts.
Shares of investment giant KKR KKR.O advanced after its quarterly profit hit a record high. Constellation Energy CEG.O CEG.O , an energy firm with exposure to the AI buildout, shot up more than 10% after its adjusted third-quarter profit surpassed expectations. Berkshire Hathaway’s BRKb.NBRKa.N BRKa.N class A shares gained after the conglomerate reported lower third-quarter profit.
Reporting by Chuck Mikolajczak; additional reporting by Niket Nishant and Utkarsh Hathi in Bengaluru; Editing by Shinjini Ganguli, Devika Syamnath and David Gregorio.
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