Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 26, 2025.
Brendan McDermid | Reuters
The S&P 500 rose on Monday as Wall Street regained some of its footing after a week in which the artificial intelligence trade lost a bit of steam.
The broad market index climbed 0.26% to finish at 6,661.21, and the Nasdaq Composite advanced 0.48% to close at 22,591.15. The Dow Jones Industrial Average settled up 68.78 points, or 0.15%, at 46,316.07.
AI chip darling Nvidia saw gains after skepticism around the AI trade put pressure on the broader stock market last week. Some traders even questioned whether there was enough energy to power an infrastructure plan between Nvidia and OpenAI. Nvidia closed around 2% higher. Other AI stocks like Advanced Micro Devices and Micron Technology added more than 1% and more than 4%, respectively.
Shares of Electronic Arts jumped 4.5% after the video game company announced that it’s going to be taken private in a $55 billion deal. U.S. mergers and acquisitions that have been announced have surpassed $1 trillion this year, up 29% from the same time a year ago, according to Goldman Sachs.
Last week’s cracks in the enthusiasm surrounding the AI buildout — a key pillar of the bull market rally — sent U.S. stocks into the red, with the S&P 500 recording its worst weekly performance since Aug. 1. The Nasdaq also posted its weakest week since early August, and the Dow suffered its first loss in three weeks.
But Venu Krishna, head of U.S. equity strategy at Barclays, said that capital expenditures in the AI industry are still providing a boost to the market.
“The AI capex story is showing no signs of slowdown. Moreover, other industries have also been benefiting from the tidal wave of AI infrastructure spend,” he said in a note on Monday. “Concentration warrants some caution, but with AI gaining momentum as the focal point of global growth, S&P 500 should be well-positioned vs. peers given its Tech-heavy sector mix.”
All eyes are watching for a possible shutdown of the federal government as this week’s funding deadline looms. The Labor Department said it will not release any data, including the September nonfarm payrolls report that is slated for release Friday, if a shutdown isn’t averted. Additionally, President Donald Trump told NBC News over the weekend that mass firings of federal workers could take place if a shutdown were to occur.
“We are going to cut a lot of the people that … we’re able to cut on a permanent basis,” the president said, adding that he’d “rather not do that.”
Government shutdowns have historically not impacted markets much, but sentiment could take a hit if any delays around the release of key economic data muddy the interest rate outlook for the Federal Reserve.
The market is still poised for modest gains for the month of September. The S&P 500 has increased more than 3% this month, while the Dow has risen nearly 2%. The tech-heavy Nasdaq has been the outperformer with a more than 5% rally.