After a slow start, the market “started to rebound and we saw a very familiar buy-the-dip trade that was led by the mega cap stocks,” said Briefing.com analyst Patrick O’Hare.
“The AI trade kicked in with news about Nvidia’s investment in Open AI.”
For the third straight session, all three major Wall Street indices powered to new all-time peaks, led by the tech-rich Nasdaq Composite Index, which finished up 0.7% at 22,788.98.
Earlier, equity markets in Europe and Asia were mixed.
Nvidia, which is part of all three US indices, gained 4.0% after the chip company announced it would invest up to US$100 billion in OpenAI to build infrastructure for next-generation artificial intelligence.
The partnership will enable San Francisco-based OpenAI to build and deploy AI data centres powered by millions of Nvidia’s sophisticated graphics processing units (GPUs), according to the companies.
The first such data centres are expected to be operating in the second half of next year.
Other tech giants with big gains include Apple, which piled on more than 4% on positive buzz about demand for its latest smartphones, and Oracle, which stands poised to provide security for a US version of TikTok’s algorithm under an agreement brokered by the Trump administration.
Oracle surged more than 6% after announcing that Clay Magouyrk and Mike Sicilia would serve as co-chief executives as the software giant beefs up its AI initiatives. Safra Catz is stepping down as CEO and will transition to executive vice chair.
But not all tech giants surged on Monday. Both Microsoft and Amazon, heavy users of H-1B visas, retreated after US President Donald Trump’s ordered a US$100,000 application fee for new H-1B skilled worker visas.
Global equities have enjoyed a healthy run-up in recent months on optimism that the US central bank will lower borrowing costs several times before the end of 2025 over worries about a softening labour market.
On the heels of recent economic reports showing weaker US jobs growth, the Federal Reserve last week lowered borrowing costs by 25 basis points, its first reduction this year.
But US stocks began the day on a weak note amid concerns over the visa question, as well as recognition that late September is traditionally a tepid period for equities.
Investors will be listening for what Fed policymakers have to say during public appearances this week.
They will also be waiting for the release on Friday of the Personal Consumption Expenditures price index, which is the Fed’s preferred measure of inflation.
Elsewhere, shares in Porsche fell 8% following news that it will dramatically slow its shift to electric vehicles amid weak demand. That prompted parent company Volkswagen to warn of a multibillion-euro hit and saw its shares close nearly 7% lower.