The S&P 500 jumped 1.44% to 7,760.29 points on Monday, closing in on its August 13 record high as chip stocks and Meta led a broad rally. Treasury yields retreated and oil prices fell, a shift one strategist said turned two recent market headwinds into tailwinds.
S&P 500 and Nasdaq close in on records
The S&P 500 jumped 1.44% to 7,760.29 points, less than 1% below its August 13 record-high close. The Nasdaq gained 2.13% to 27,086.06 points, less than 0.1% below its June 2 record close, while the Dow Jones Industrial Average rose 0.61% to 51,996.40 points.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.6-to-one ratio. The index posted five new highs and 27 new lows, while the Nasdaq recorded 51 new highs and 102 new lows. Seven of the 11 S&P 500 sector indexes rose, led by a 4.3% gain in communication services, followed by a 2.0% rise in information technology.
Chip stocks and Meta drive the gains
Advanced Micro Devices rose as much as 10% and reached a $1 trillion market capitalization for the first time; the stock was last up 8%. Intel and Arm Holdings both surged over 12%, and the PHLX semiconductor index jumped 3.7%.
Meta soared 11% after Wells Fargo raised its price target on the social media company following the recent launch of its Muse AI assistant.
Investors pointed to signs that spending on AI is still expanding, even after safety warnings from AI industry leaders a week earlier had triggered a global tech selloff.
Yields and oil shift from headwinds to tailwinds
The benchmark US 10-year yield fell below the 5% level as Brent crude futures dipped below $100 a barrel, their lowest level since September 9, on speculation about a possible breakthrough in Middle East talks at a UN meeting this week. According to Art Hogan, chief market strategist at B. Riley Wealth: "they've shifted from being headwinds to tailwinds for this market".
The S&P 500 last Friday traded at just under 19 times expected earnings, its lowest valuation since 2023, according to LSEG data. Investors remain wary of the interest-rate outlook after the Federal Reserve raised rates last week for the first time in three years to fight inflation; traders see a 50% chance of another hike next month, according to CME's FedWatch.
Source: Investing.com
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