Chip stocks and other big technology shares rallied Monday, extending Friday’s gains and suggesting fears of an AI bubble are receding.
The S&P 500 rose 1.5%, adding to gains after President Trump posted on social media that he had held “a very good telephone call with President Xi” and planned to visit the Chinese leader in Beijing in April.
Revived hopes that the Federal Reserve will cut interest rates next month also bolstered markets.
The chance of a December rate reduction went above 80% on Monday, according to interest-rate futures prices tracked by CME, up from 71% on Friday and 42% a week ago.
Overseas, European defense stocks fell after the White House hailed progress following peace talks with Ukraine on Sunday. European natural-gas futures also dropped.
Bitcoin traded at about $89,000. Last week, the cryptocurrency had its worst weekly loss since February.
In Asia, Alibaba shares rallied, bolstering Hong Kong’s Hang Seng Index. Japanese markets were shut for a holiday.