All three major U.S. stock indexes closed higher, led by Nvidia shares after the company announced plans to build an artificial intelligence (AI) supercomputer for the U.S. Department of Energy.
Investor sentiment also improved ahead of quarterly earnings announcements from tech giants this week.
Nvidia shares jumped 5%, adding more than $230 billion to the company's market value, bringing it closer to $5 trillion.
Microsoft shares rose 2% after the company reached a deal that will see OpenAI restructured as a public benefit corporation, giving Microsoft a 27% stake in the ChatGPT developer.
Apple shares edged up 0.1%, after the company surpassed $4 trillion in market value for the first time.
Quarterly results from Apple, Microsoft, Alphabet, Amazon and Meta Platforms are expected this week.
The Dow Jones Industrial Average rose 0.34% to 47,706.37, the S&P 500 gained 0.23% to 6,890.89, while the technology-focused Nasdaq rose 0.8% to 23,827.49.
In other news, the Federal Reserve (Fed) will begin a two-day policy meeting on Wednesday at 9:00 pm Malaysian time, with the central bank widely expected to cut interest rates by 25 basis points.
Investors will be looking for clues on the next direction of interest rates after a nearly month-long US government shutdown that delayed the release of economic data and forced traders to rely on corporate reports and private sector data.
Market attention is also on a meeting between US President Donald Trump and Chinese President Xi Jinping this weekend.
The meeting between the two leaders is expected to include discussions on a trade framework to reduce US tariffs on Chinese goods in exchange for Beijing's commitment to limit exports of fentanyl precursor chemicals.
Meanwhile, Trump also met with Japanese Prime Minister Sanae Takaichi on the sidelines of a summit in Tokyo yesterday.
The two leaders signed an agreement to increase supplies of critical minerals and rare earths in an effort to reduce China's dominance in global supply chains.
