Stocks edged higher on Monday as Wall Street attempted to recover from last week’s pullback, when concerns about the durability of the artificial intelligence trade weighed on broader markets.
The S&P 500 was up 0.32% to 6,665.29. The tech heavy Nasdaq 100 was trading 0.68% higher at 22,636.124.
The Dow Jones Industrial Average in contrast opened 14 points lower on Monday.
Gains in AI-related names, along with merger activity and sector-specific moves, helped lift sentiment in early trading.
AI stocks rebound after pressure
AI-linked stocks Oracle gained about 1% while Nvidia surged more than 2% in trading, reversing some of last week’s weakness.
Both companies had been under pressure after skepticism emerged around the scalability of artificial intelligence infrastructure.
Some traders questioned whether sufficient energy resources existed to support Nvidia’s partnership with OpenAI, contributing to the previous sell-off.
Despite the concerns, Nvidia and Oracle staged modest recoveries to start the week.
Their performance remains closely watched, given their outsized influence on the AI theme that has underpinned much of the equity rally in 2025.
Last week, cracks in the AI narrative weighed heavily on indices.
The S&P 500 suffered its worst weekly decline since August 1, closing 0.8% below its record high.
The Nasdaq recorded its weakest week since early August, while the Dow Jones Industrial Average posted its first weekly loss in three weeks.
M&A activity and stock movers
Merger activity provided an additional lift to sentiment.
Shares of Electronic Arts jumped nearly 5% after the company announced a $55 billion deal to be taken private by a consortium including Saudi Arabia’s Public Investment Fund, Silver Lake, and Affinity Partners.
The transaction marks the largest leveraged buyout in history.
Goldman Sachs reported that US M&A activity has surpassed $1 trillion year-to-date, up 29% from the same period a year ago.
Other notable movers included cannabis stocks, which surged after President Donald Trump posted a video on Truth Social promoting the benefits of cannabinoids for seniors.
The AdvisorShares Pure U.S. Cannabis ETF (MSOS) soared 19%, while Aurora Cannabis gained 22%.
Novo Nordisk fell 2.6% following a downgrade from Morgan Stanley to underweight from equal weight, with analysts citing growing competition in the GLP-1 drug market.
Lam Research advanced 3% after Deutsche Bank upgraded the semiconductor equipment maker to buy from hold, citing improving demand prospects for wafer fabrication equipment and a more favorable valuation.
AppLovin rose 5.1% after Morgan Stanley raised its price target to $750 from $480, pointing to the October 1 launch of the company’s self-serve tool for non-gaming advertisers as a major growth catalyst.
Meanwhile, Boeing fell 1.3%, showing sell-off after Friday’s 3.6% rally as the Federal Aviation Administration signaled it would ease restrictions on issuing airworthiness certificates for some 737 Max aircraft.
Intel slipped 3.5% as its recent sharp rally left the stock in technically overbought territory, with a relative strength index of 80.
Macro outlook in focus
Investors are also bracing for political and economic developments this week.
A potential US government shutdown looms as Congress faces a funding deadline.
Over the weekend, President Trump told NBC News that mass firings of federal workers could take place if lawmakers fail to reach a deal.
On the economic front, markets are looking ahead to Friday’s release of the September nonfarm payrolls report.
Many investors are hoping for a “goldilocks” outcome — job growth strong enough to signal resilience but not so hot as to reignite fears of tighter Federal Reserve policy.
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