AI Surge Propels S&P 500 as Small-Caps Soar

S&P 500 rose on Monday, driven by the strength in chipmakers and AI-related companies, with notable gains in small-cap stocks. The Russell 2000 index outpaced both S&P 500 and Nasdaq. Major companies like Alphabet and Amazon also saw gains, anticipating AI-related earnings growth. Concerns about high tech valuations linger.

The S&P 500 closed up on Monday, gaining momentum from increases in AI-related chipmakers, while smaller companies also saw significant rises. The Russell 2000 index particularly stood out, exceeding S&P 500 and Nasdaq growth in 2026 so far.

Anticipation built around forthcoming earnings reports from major players, Alphabet and Amazon, as they continue in the race to capture AI market dominance. Palantir also rose ahead of its quarterly report. Chipmakers such as SanDisk, Advanced Micro Devices, and Micron Technology experienced rallies due to the growing demand for AI components.

This was the S&P 500's first increase in three sessions as it had recently faced valuation concerns over tech companies whose shares have surged on AI optimism. Meanwhile, growth in small-cap stocks underscored investor confidence in the economy, with positive surprises in revenues and earnings reported across many companies.

(With inputs from agencies.)