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US stocks climbed to record highs on Monday, boosted by semiconductor strength following Advanced Micro Devices Inc.’s partnership with OpenAI. The S&P 500 advanced 0.4% by midday in New York, extending its seven-day winning streak, the longest since May. The NASDAQ 100 gained 0.8%, while the Dow Jones Industrial Average slipped 0.3%.
AMD shares jumped 27% after the company unveiled a multibillion-dollar AI infrastructure deal with OpenAI, signaling strong demand for advanced chips. The Philadelphia Semiconductor Index rose 3.9%, while NVIDIA Corp. edged 0.6% lower. Tesla Inc. also climbed after signaling a forthcoming product reveal.
Investor optimism surrounding artificial intelligence and corporate earnings outweighed concerns about the ongoing US government shutdown. “The animal spirits surrounding the AI phenomenon are getting yet another boost,” said Matt Maley of Miller Tabak. Analysts noted that traders remain focused on earnings prospects and potential Federal Reserve rate cuts.
Bespoke Investment Group highlighted two upcoming milestones for investors. Wednesday marks six months since the S&P 500 last reached its yearly low, and Sunday will be the third anniversary of the current bull market, which began on October 12, 2022. The firm noted that when the index’s six-month change exceeds 30%, markets often pause in the near term but maintain strength over the following year.
Strategists noted that historical data indicate modest pullbacks after such streaks are common, yet long-term momentum typically continues. This perspective aligns with forecasts from Barclays Plc, whose equity timing indicator indicates an 82% chance that the S&P 500 will rise again over the next two months.
Bond yields advanced globally, with the 10-year US Treasury up four basis points to 4.16%. Germany’s equivalent rose to 2.72%, and the UK’s reached 4.74%. The dollar strengthened 0.3%, while the yen fell 1.8% to 150.16 per dollar.
Gold surged 1.7% to a record $3,952.32 an ounce, reflecting safe-haven demand amid fiscal concerns. Bitcoin increased 2.1% to $125,392, and West Texas Intermediate crude climbed 1.5% to $61.78 per barrel after OPEC+ announced a modest production hike.
In corporate developments, Fifth Third Bancorp agreed to acquire Comerica Inc. in a $10.9 billion stock deal, the largest US bank merger this year. Verizon Communications appointed Dan Schulman as CEO, replacing Hans Vestberg. Meanwhile, Micron Technology rose after Morgan Stanley upgraded its rating, citing multiple quarters of expected price increases.
Additional headlines included Boeing's strategic intention to increase 737 Max production, Apple's inquiry in France regarding Siri recordings, and the United States Supreme Court's rejection of appeals submitted by Meta and Live Nation.
Additionally, market strategists from Goldman Sachs and Morgan Stanley expect third-quarter earnings to exceed forecasts, driven by a resilient economy and continued investment in AI. Goldman’s David Kostin projected that the “Magnificent Seven” tech giants will outperform estimates, while Morgan Stanley’s Michael Wilson said renewed inflation could strengthen corporate pricing power.
