New York — Driven by soaring artificial intelligence (AI) optimism and declining oil prices, the three major U.S. stock indices closed sharply higher on Monday.

The tech-heavy Nasdaq Composite Index surged 599.55 points, or 2.3%, to close at a record high of 27,122.09, marking its largest daily percentage gain since August 4 (2.6%).

The S&P 500 Index rose 114.20 points, or 1.5%, to finish at 7,764.70, while the Dow Jones Industrial Average added 366.19 points, or 0.7%, to end at 52,048.83.

Investor sentiment was significantly boosted by a wave of enthusiasm surrounding AI. Meta's new personal work AI agent, "Muse," captured the number one spot on the Apple App Store's free app chart, sparking a positive chain reaction across related tech stocks.

Meta shares leaped 11.4%, logging their largest single-day surge since April of last year.

Meanwhile, AMD shares jumped 10% to close at $615.52, pushing the chipmaker's market capitalization past the $1 trillion milestone. AMD joins NVIDIA, Broadcom, and Micron in the elite club of U.S. semiconductor companies valued at over $1 trillion.

Intel shares soared 12.1%, and Qualcomm climbed 9.3%.

"The physical processors required for AI agents are primarily built by just two companies: Intel and AMD," noted Wedbush analyst Matt Bryson, explaining why centralized processing unit (CPU) makers drew intense market attention.

Market optimism was further reinforced as major corporations showed no signs of cutting back on AI spending, despite earlier concerns regarding an AI slowdown.

Falling Oil Yields and Bond Yields Provide Tailwind
Adding to the market momentum, oil prices extended their losing streak to four consecutive sessions, while U.S. Treasury yields pulled back.

International crude prices dropped sharply amid growing expectations that diplomatic efforts could avert a conflict between the U.S. and Iran ahead of the United Nations General Assembly.

West Texas Intermediate (WTI) crude for October delivery fell 4.5% to settle at $95.78 a barrel, while Brent crude for November delivery dropped 3.4% to $100.34 a barrel.

Easing inflation concerns also helped stabilize soaring U.S. Treasury yields.

The yield on the benchmark 10-year Treasury note dipped 2 basis points to 4.972%, and the 30-year Treasury yield settled at 5.305%.

"If you look at oil prices and the 10-year Treasury yield alone, the market has shifted from facing headwinds to enjoying tailwinds in the short term," said Art Hogan, chief market strategist at B. Riley Wealth.

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