S&P 500 and Nasdaq Reach New Highs as AI Stocks Overcome Oil Surge

The stock market kicked off the week with another round of record highs, as strength in artificial intelligence and mega-cap technology stocks outweighed the headwinds from rising oil prices and lingering geopolitical uncertainty. The S&P 500 gained 0.3%, the Nasdaq Composite advanced 0.4%, and the Dow Jones Industrial Average added 0.1%, with all three major indices touching fresh all-time highs during Monday’s session.

Investor sentiment was tested early in the day after reports indicated that Iran had suspended communications with the United States in protest of Israel’s military operations in Lebanon. The development sparked a sharp rally in crude oil prices, fueling concerns about energy markets and inflation. Oil remained elevated throughout the session, although prices retreated from their highs after President Trump stated on Truth Social that negotiations with Iran were continuing “at a rapid pace.” Even so, WTI crude futures settled up 5.5% at $92.19 per barrel.

Despite the positive finish for the major averages, market leadership remained highly concentrated. The information technology sector surged 2.5% and accounted for much of the market’s gains. AI-related stocks continued to attract strong buying interest, led by NVIDIA and Microsoft after the companies announced a partnership to develop a secure Windows platform designed for next-generation on-device AI agents. Dell Technologies also benefited from the announcement, posting another strong advance.

Software stocks extended their recent momentum as investors continued to embrace companies positioned to benefit from accelerating AI adoption. The iShares Expanded Tech-Software Sector ETF jumped 5.9%, underscoring the sector’s growing leadership role in the market’s advance.

Outside of technology and energy, however, the picture was less encouraging. Rising oil prices weighed on several economically sensitive and interest-rate-sensitive groups, limiting broader participation. The consumer discretionary sector fell 2.6%, while utilities declined 3.1%. In total, nine of the eleven S&P 500 sectors finished the day in negative territory.

Small- and mid-cap stocks also lagged the headline indices. The Russell 2000 slipped 0.5%, while the S&P MidCap 400 lost 0.1%, highlighting the narrow nature of the rally despite the record-setting performance of the major averages.

Corporate developments generated several notable individual stock moves. MGM Resorts surged after confirming it had received an acquisition proposal from IAC. Meanwhile, Taylor Morrison Home rallied sharply after Berkshire Hathaway agreed to acquire the homebuilder in an $8.5 billion all-cash deal.

FedEx was another company in focus after completing the spin-off of FedEx Freight, which began trading as an independent publicly traded company.

Monday’s session reinforced a theme that has defined much of the market’s recent advance: powerful AI-driven enthusiasm within a select group of technology leaders continues to propel the major indices higher. While record highs remain intact, the relatively narrow participation beneath the surface suggests investors are still favoring a concentrated group of growth stocks as they navigate elevated oil prices and ongoing geopolitical uncertainty.

Our FTinvest 11 model portfolio declined today 4.30% to close at 1,024.49, marking its sharpest single-day drop of the year. The decline follows a strong run that recently carried the portfolio to an all-time high of 1,078.93, and was primarily driven by a significant setback in one portfolio component, which fell approximately 44% during the session.

Despite the sharp pullback, FTinvest 11 remains up approximately +10.38% year-to-date. While today’s decline represents a meaningful setback, it was largely attributable to a company-specific event rather than broad weakness across the portfolio. The portfolio’s disciplined, value-driven approach remains unchanged, and its long-term performance continues to reflect the benefits of diversification and active management through varying market conditions.