AI Surge Propels Stock Market Gains

The S&P 500 saw gains on Monday with AI-related stocks like chipmakers leading the charge. While smaller companies also surged, the Russell 2000 index outperformed major indexes. Tech giants Alphabet and Amazon reached record highs. General confidence in the market was boosted by strong earnings and economic indicators.

The S&P 500 closed higher on Monday as chipmakers and AI-related companies saw impressive gains. Smaller companies advanced sharply, with the Russell 2000 index climbing about 1%, showing an outstanding performance compared to the S&P 500 and Nasdaq thus far in 2026.

Alphabet reached a record 1.9% increase, while Amazon rose 1.5%, setting the stage for quarterly reports this week that are expected to further assess the competition within the AI technology sector. Palantir, an AI-data firm, also rose 0.8% in anticipation of its own quarterly report.

The S&P 500 saw its first gains in three sessions despite valuation worries, driven by continued optimism around AI technology. In comparison, the Russell 2000 had a stronger rally, while S&P tech companies are anticipated to grow earnings by nearly 11% this quarter. Wall Street remains optimistic as U.S. factory activity shows growth for the first time in a year.

(With inputs from agencies.)