US stock markets edged higher on Monday, buoyed by continued investor excitement surrounding artificial intelligence, even as other factors weighed on market sentiment. The S&P 500 and Nasdaq Composite both achieved new all-time closing highs, though gains were modest. The Dow Jones Industrial Average saw a minimal increase.
The AI sector continued to lead market momentum, particularly semiconductor stocks. Intel shares rose following reports of a potential chip-making agreement with Apple, and Qualcomm also saw significant gains. Companies like Dell, ON Semiconductor, and Astera Labs are being watched as under-the-radar AI stocks with growth potential. This AI fervor is occurring as major tech companies are planning to spend nearly $700 billion on AI infrastructure this year.
However, rising crude oil prices and stalled negotiations between the US and Iran created some headwinds. Rising oil prices are stoking inflation worries, while the impasse in US-Iran talks adds geopolitical uncertainty. Some airline stocks, including Southwest and Delta, experienced declines due to concerns that rising oil prices could squeeze margins. The US and Iran remain divided over Iran's nuclear program and control of the Strait of Hormuz.
Investors are now shifting their focus to upcoming inflation data, consumer demand trends, and key macroeconomic releases to assess the sustainability of the current market rally.
