U.S. equities pushed higher on Monday, with the S&P 500 and Nasdaq Composite both closing at new all-time highs as gains in semiconductor and energy stocks offset headwinds from rising crude prices. The Dow Jones Industrial Average also edged up, adding 0.17% to 49,694.92.
The S&P 500 rose 0.23% to 7,416.00, while the Nasdaq Composite gained 0.12% to 26,277.35, according to LSEG data. The rally was underpinned by continued strength in chipmakers, with Intel and Qualcomm advancing. Intel extended gains from Friday on news of a potential chip deal with Apple, while Qualcomm hit a fresh record high. Other notable names like Nvidia, Cisco, and Applied Materials also drew investor attention as AI-driven demand remains a key theme.
Energy stocks tracked crude's advance as Brent crude climbed 2.63% to $103.95, following a stall in U.S.-Iran nuclear talks. The jump in oil prices reignited inflation concerns, though the broader market held its ground. However, airline stocks—including Southwest, Delta, and United—edged lower as higher fuel costs pressured profit margins. The S&P 500 VIX, Wall Street's volatility index, also moved higher.
“The worry list is long, but the economy keeps proving the bears wrong,” said Robert Edwards, chief investment officer at Edwards Asset Management, in comments to Reuters. Investors are now turning their attention to Tuesday's consumer price index (CPI) release, which will provide a snapshot of inflationary pressures on households. “Key inflation data will be released this week and the stakes couldn’t be higher,” wrote Jay Woods, chief market strategist at Freedom Capital Markets, in a note cited by Investopedia.
Earnings continue to provide a supportive backdrop. HSBC raised its year-end S&P 500 target to 7,650 from 7,500, citing stronger-than-expected profit growth. According to the bank, first-quarter earnings for the S&P 500 could jump nearly 29% from last year, driven largely by megacap tech stocks tied to AI. “While earnings remain supportive, sentiment is on shakier ground,” HSBC strategists wrote.
Despite the record highs, the rally remains narrow. Jamie McGeever at Reuters noted that just ten U.S. stocks now account for 33% of total market value. RBC analysts flagged that the market-cap-weighted S&P 500 has outperformed its equal-weight counterpart by over 30%, highlighting that gains are concentrated in the largest names. If top tech names post weak AI earnings or guidance, the fallout could ripple quickly through index funds and ETFs.
Investors remain cautiously optimistic. “We want to be in there for the equity bull market,” Grace Peters at JPMorgan Private Bank told Bloomberg, though she emphasized the need for portfolios to maintain resilience. The catch, however, is that a CPI surprise to the upside, further oil rally, or stalled U.S.-Iran talks could force a reassessment of the Federal Reserve's ability to hold off on rate hikes. Oppenheimer flagged high oil and supply-chain disruptions as real inflation threats in the short run, while also noting the Middle East conflict could weigh on markets.
