The S&P 500 sits within striking distance of a record high after a rally concentrated in a handful of AI-linked stocks, and the move extended into Tuesday trading. Falling oil prices and easing Treasury yields, tied to hopes for progress in U.S.-Iran relations, added further support.
The S&P 500 climbed 1.5% on Monday, a burst CNBC's Mike Santoli linked to a narrow group of AI implementers within Big Tech. The index closed the session at 7,764.70, just 0.4% below its August 13 record.
AI stocks drive the record Nasdaq close
The Nasdaq Composite closed at a record 27,122.09, a gain of 599.55 points, its first record close since June. Advanced Micro Devices led the move, with shares climbing roughly 10% and pushing its market capitalization past $1 trillion for the first time. Meta Platforms followed, surging over 11% after its latest AI product gained traction.
Rate and oil moves ease pressure
The rally followed the Federal Reserve's first interest rate hike in three years on September 16. Even so, the 10-year Treasury yield slipped below 5%, settling in the 4.93-4.95% range. West Texas Intermediate crude also tumbled more than 2% to around $93.60 a barrel. Kyodo News reported that Iran offered to reopen the Strait of Hormuz within seven days if the U.S. takes initial steps toward easing military pressure, according to a senior Iranian government official cited by the wire.
Tuesday's open extended the advance, with the Dow up 0.2% and the S&P 500 up 0.2%. The tech-heavy Nasdaq gained 0.5% in morning trading as well. AMD, however, lost nearly 2% premarket, threatening to give back part of Monday's gain.
Leadership still rests on a narrow base
Santoli described the tape as spotty and hot-and-cold even after Monday's burst. On the day the S&P 500 rose 1.5%, the New York Stock Exchange logged 160 new 52-week lows against just 29 fresh highs. He added that the Fed chair signaled financial conditions remain too loose and might need to remove another "dose of accommodation" or two.
That leaves the market's gains resting on the same handful of AI-linked names that have carried it through the summer's narrow, familiar leadership, even after an interest rate hike meant to tighten conditions.
Sources: CNBC, Crypto Briefing, Investor's Business Daily
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