The Nasdaq hit a record closing high on Monday, its first since June 2, largely fueled by significant gains in AI-related stocks. Advanced Micro Devices (AMD) saw a 10% increase, reaching a market capitalization of $1 trillion for the first time. Intel and Arm Holdings also surged over 12%, contributing to a 4.3% jump in the PHLX semiconductor index. Investors continue to show strong confidence in AI spending despite recent safety warnings from industry leaders that had caused a tech sell-off a week prior.
Alongside the AI rally, falling oil prices and declining long-dated Treasury yields bolstered overall market sentiment. U.S. crude prices dropped 4.86% to $95.43 a barrel, while Brent crude fell 3.62% to $100.11 per barrel on Monday. This decline was attributed to signs of improving oil supply from the Middle East, with reports indicating Iran's potential to reopen the Strait of Hormuz if U.S. military pressure and sanctions on Iranian ports are eased. Saudi Arabia also reportedly restarted operations at its East-West Pipeline.
The Nasdaq Composite ended up 2.26%, reaching a new record. The S&P 500 gained 1.49%, nearly reaching its own record, and the Dow Jones Industrial Average rose 0.71%. On Tuesday, the Nasdaq continued its upward trend, gaining 0.40% to 27,231.59, while the S&P 500 remained relatively flat and the Dow Jones Industrial Average saw a slight decrease of 0.40%. The 10-year U.S. Treasury yields also declined, down 0.17 basis points to 4.961% on Tuesday, with German and U.S. bond yields falling in line with oil prices.
