U.S. stocks started the week higher as falling crude prices, expectations for possible signs of easing between the United States and Iran, and broad gains among large technology companies lifted the major indexes. The Nasdaq Composite rose 599 points, or 2.3%, to 27,122, setting a record closing high. The S&P 500 gained 1.5% to finish at 7,764, while the Dow Jones Industrial Average advanced 0.7% to 52,048.
Nasdaq Sets Record as Technology Stocks Lead
Monday's gains were concentrated in large technology companies and semiconductor stocks. Communication services ranked among the strongest-performing S&P 500 sectors, followed closely by technology, while chipmakers posted particularly sharp advances. Investor attention on Meta's launch of its Muse artificial intelligence agent helped lift expectations for demand for computing capacity, semiconductors and data centers.
Intel rose 12.1%, extending the rally that began last week. Market focus has centered on reports of discussions between Intel and SK Hynix over domestic chip manufacturing in the United States, and those expectations continued to support Intel's shares. SK Hynix gained 0.7% on the day. Advanced Micro Devices and Arm also moved higher, making them important contributors to the Nasdaq's advance.
Oil Pullback Eases Pressure on Energy Costs
Front-month West Texas Intermediate crude futures fell 4.5% to $95.78 a barrel. Prices have dropped nearly 10% from a recent peak of close to $106 on September 15. The retreat in oil prices eased some concerns about energy costs and inflation, creating a less restrictive trading backdrop for technology stocks with relatively high valuations.
José Torres, senior economist at Interactive Brokers, said markets were optimistic that contacts or a ceasefire arrangement could emerge during this week's United Nations General Assembly. If tensions ease, shipping activity through the Strait of Hormuz could gradually recover. Diplomatic developments could still influence energy prices and volatility in risk assets, however, leaving investors focused on the outcome of actual negotiations rather than on any single statement.
U.S.-China Trade Talks Remain a Key Variable
Wall Street is also watching high-level talks between the United States and China scheduled for this week. Jay Woods, chief market strategist at Freedom Capital Markets, said investors wanted to see an agreement or arrangement that could reduce tariffs and improve supplies of critical minerals. Positive progress could continue to support technology, industrial and consumer stocks, while stalled negotiations could revive concerns about trade friction and widen market swings.
Monday's rally therefore reflected buying in chip and artificial-intelligence-related stocks, as well as the retreat in oil prices and a temporary easing in geopolitical concerns. With the Nasdaq at a record close, markets will be watching whether diplomatic negotiations, energy prices and company-specific semiconductor news can continue to support the advance.