The S&P 500 and Nasdaq rose on positive investor sentiment following a series of artificial intelligence (AI)-related deals, even as the US government shutdown dragged on for a sixth day.
Chip stocks led the gains after AMD announced a new deal to supply AI chips to OpenAI – a move that could generate billions of dollars in annual revenue and allow the ChatGPT creator to take a stake of up to 10% in the chipmaker.
AMD shares rose 23.7%, while the Philadelphia Semiconductor Index rose 2.9%.
The S&P 500 index rose 0.36% to 6,740.28 points, the tech-focused Nasdaq gained 0.71% to 22,941.67 points, and the Dow Jones fell 0.14% to 46,694.97 points.
In other news, the federal government remained closed for a sixth day due to a political stalemate among lawmakers.
The shutdown also delayed the release of key economic data, especially jobs, and forced investors to rely on non-government sources to gauge the possibility of a rate cut by the Federal Reserve (Fed).
Some monetary policymakers have warned against rushing to lower the Federal Funds target rate as inflation remains high, while others say a weak labor market supports the need for a rate cut.
The market now expects a 94.6% probability that the Fed will cut interest rates by 25 basis points at its meeting in late October.
With no new data from the US government this week, investors are focusing on the outstanding consumer credit report, mortgage applications and the University of Michigan's preliminary October consumer sentiment survey.
Meanwhile, Tesla shares jumped 5.5% after the electric vehicle (EV) company sparked speculation about the event scheduled for Tuesday through a post on its X platform over the weekend.
In contrast, Verizon shares fell 5.1% after the telecommunications company appointed former PayPal CEO Dan Schulman as its new CEO.
Trading volume on the US exchange was $19.69 billion, compared to an average of $19.17 billion over the past 20 trading days.
