The Nasdaq hit a record closing high on Monday, lifted by gains in AMD and other AI heavyweights, while falling oil prices and long-dated US treasury yields also boosted risk sentiment.
Chip stocks rallied, with Intel and ARM Holdings surging more than 12% and the PHLX semiconductor index jumping 4.3%.
AMD closed 10% higher to reach a market capitalisation of US$1-trillion for the first time. CNBC reported that the milestone came on a five-day run that has added about a quarter to the share price, and that CEO Lisa Su told investors last month AMD expects to double data centre sales in 2027. The company remains far behind Nvidia, whose swings now move whole indices.
Investors pointed to signs that spending on AI is still expanding, despite safety warnings from the leaders of the largest AI companies a week ago that triggered a global technology selloff.
The Nasdaq Composite rose 2.26% and posted a record closing high for the first time since 2 June, while the S&P 500 gained 1.49%, just shy of its record. The Dow Jones industrial average ended up 0.71%. MSCI’s All-World index rose 1.31% and European shares rallied 1.02%.
Risk appetite remains strong despite growing expectations of further rate increases, and despite the argument over whether the AI trade has run ahead of itself.
“While synchronised rate hikes have raised concerns about risk assets, equities remain near record highs, supported by strong earnings growth,” said Seema Shah, chief global strategist at Principal Asset Management.
Rising interesting rates
“Importantly, central banks are raising rates to address inflation rather than to slow economic activity, suggesting tightening will be gradual and limited. While higher rates may hinder further multiple expansion, they are unlikely to materially pressure earnings or derail the broader bull market.”
Central banks in most major economies are expected to raise rates again this year. Hawkish guidance from the US Federal Reserve last week has futures wagering on a 55% chance of another increase in October, with 91% odds of one by year-end. — (c) 2026 Reuters
