Wall Street remains near record levels as AI frenzy keeps tech stocks climbing

Wall Street is hanging near its records on Monday, as technology stocks keep rising.

The S&P 500 rose 0.3%, coming off its latest all-time high. The Dow Jones Industrial Average added 17 points, or less than 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.

Advanced Micro Devices soared 32.6% to help lead the market after announcing a deal where OpenAI will use its chips to power artificial-intelligence infrastructure. As part of the deal, OpenAI could own up to 160 million shares of AMD if it hits certain milestones.

A frenzy around AI has been one of the main reasons Wall Street has been hitting record after record, though that’s also raising worries that prices have potentially shot too high. Much of the furor around AI in the last couple weeks has come from OpenAI, which has quickly become a $500 billion company, announcing deals with businesses around the world to develop more AI infrastructure.

Another chip company, Nvidia, announced a deal last month where it would invest $100 billion in OpenAI as part of a partnership, creating criticism that the AI investment pipeline was beginning to appear like a circle. Nvidia fell 1.5% following the AMD announcement.

Outside of tech, Comerica jumped 16.5% after Fifth Third Bancorp agreed to buy its rival in an all-stock deal valued at $10.9 billion. The combination would create the country’s ninth-largest bank. Fifth Third added 1%.

Elsewhere on Wall Street, trading remained relatively quiet as the stock market continues to largely ignore the U.S. government’s shutdown. Past closures of the federal government have had minimal effect on the stock market or on the economy, and the bet on Wall Street is that something similar will happen again.

Politics are playing a more active role in stock markets abroad, though, as Japanese stocks soared and French stocks slumped following their latest political shake-ups.

Japan’s Nikkei 225 jumped 4.8% after the country’s Liberal Democratic Party chose Sanae Takaichi as its leader and likely Japan’s first woman prime minister. She was an ally of the late Prime Minister Shinzo Abe, who pushed for lower interest rates and market-friendly policies.

The yen’s value dropped against the U.S. dollar on expectations that Takaichi will boost spending, likely adding to inflationary pressures. That in turn helped push up stocks of Japanese exporters, whose products can become more attractive on the global market because of a cheaper yen.

“Obviously, investors like what she has been saying and certainly today judging by the number of stocks that moved and which stocks moved, it seems like pretty much led by foreigners so far,” Neil Newman, head of strategy at Astris Advisory Japan, said about Takaichi.

In Paris, the CAC 40 index slumped 1.2% following the resignation of France’s new prime minister.

Sébastien Lecornu resigned a day after he named his government, drawing a backlash across the political spectrum for his choice of ministers. French politics have been in disarray since President Emmanuel Macron called snap elections last year that produced a deeply fragmented legislature.

In the bond market, the yield on the 10-year Treasury rose to 4.16% from 4.13% late Friday.

The shutdown of the U.S. government means fewer economic data releases this week, though markets will have some earnings reports to comb through, including from Delta Air Lines, PepsiCo and Levi Strauss.

Despite the shutdown, the Federal Reserve will release minutes from its meeting last month when it cut its benchmark interest rate for the first time this year.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

—Stan Choe, AP Business Writer