Nasdaq Hits Record High Due to AI Stock Gains

The Nasdaq reached a record high close, pushed up by Micron Technology and other artificial intelligence stocks, while the S&P 500 stayed just below a record high. Chip stocks added to recent gains, but consumer-related software shares lost ground as investors reacted to the strong launch of Meta Platforms' AI assistant, Muse, which can send emails and complete transactions. The success of Muse pushed up AI-related chip stocks, but also caused worry that it could compete with retailers, online brokerages and other consumer firms. Amazon blocked the agent from shopping on its platform on Monday. Jed Ellerbroek, a portfolio manager at Argent Capital Management, noted that tech stocks fell due to fears that Muse will manage insurance, book travel and shop for users. Ride-hailing apps Uber Technologies and Lyft lost ground, along with Expedia and Charles Schwab. Memory chipmakers Micron and SanDisk both rallied, while JPMorgan Chase and Wells Fargo lost ground. Oil prices stayed near 100 dollars a barrel, and the 10-year Treasury note yield hovered around 4.94 percent after US President Donald Trump warned in a speech to the UN General Assembly that he could annihilate the Islamic Republic if no deal is reached to end the Middle East conflict. Investors also waited for a US-China summit on Thursday to see if a trade truce could be extended and if talks would touch on AI regulation. Joe Saluzzi, head of equity market structure research at Themis Trading, stated that people want the start of a conversation for a global framework rather than fighting. Preliminary data showed the S&P 500 lost 0.43 points to end at 7,764.27, the Nasdaq gained 121.15 points to 27,243.24, and the Dow Jones fell 184.94 points to 51,863.89. The S&P 500 was less than 1 percent below its August 13 record high close and traded at just under 19 times expected earnings, its lowest valuation since 2023. Boston Federal Reserve President Susan Collins supported last week's interest rate increase due to inflation risks, and New York Fed President John Williams said the Fed's framework for controlling short-term rates has been effective. Traders see a 53 percent chance the Fed will increase interest rates by at least 25 basis points in October.