Stocks emerged as a bright spot after the long holiday weekend. AI-themed stocks continue to drive the market. Expectations for AI-related infrastructure demand grew over the weekend. Big tech companies were once expected to invest $600 billion in AI infrastructure in 2026, but they are now expected to invest more than $700 billion. Following these updates, stocks like Micron Technology soared. For Micron specifically, a UBS analyst tripled the price target from $535 to $1,625.
Furthermore, the market expected the U.S.-Iran negotiations to conclude sooner after President Trump and his team touted progress toward a peace deal, even amid fresh hostilities and uncertainty. Crude oil prices remain relatively calm, with Brent at $86.50 per barrel.
The Dow Jones Industrial Average was the only index to post losses because it has less exposure to niche AI-related stocks, ending the day 118 points lower at 50,462. The Nasdaq jumped 1.76% to 30,001, a fresh record. The S&P 500 gained 0.61% to 7,519, also a fresh record.
The Treasury market rallied as hopes for a peace deal subdued future inflation expectations. The 5-year U.S. Treasury yield declined by 9 basis points to 4.18%, and the 10-year yield declined by 8 basis points to 4.49%. The 30-year yield also fell to 5.03%. Gold stayed flat.
Economic data showed that consumer confidence continues to slide as cost-of-living expectations worsen. Nevertheless, with AI as a major market theme, consumer sentiment has become less directly relevant to the stock market in recent years.
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