AI Surge Propels Stock Market Gains

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.