Wall Street rallied sharply on Monday as investors returned to artificial intelligence stocks and falling oil prices improved market sentiment.
The strongest gains came from technology and communication services shares, with Meta Platforms leading the advance.
At 14:08 ET (18:08 GMT), the S&P 500 was up 1.5% at 7,762.98, while the Nasdaq Composite surged 2.1% to 27,083.37. The Dow Jones Industrial Average gained 0.7% to 52,028.28.
Investors were also looking ahead to Chinese President Xi Jinping’s visit to Washington later in the week.
Meta Leads Powerful AI Stock Rally
Technology and communication services stocks dominated Monday’s gains.
The S&P 500 communication services sector climbed around 4%, while the technology sector advanced approximately 2.1%.
Meta Platforms attracted the most attention, with shares jumping about 11.6%.
The rally followed several positive developments surrounding the company’s artificial intelligence strategy.
Wells Fargo Raises Meta Price Target
Wells Fargo increased its price target on Meta shares to $796, implying substantial upside from the previous closing price.
The brokerage pointed to improving progress across Meta’s artificial intelligence initiatives.
The bullish call also arrived just ahead of Meta Connect 2026, which is scheduled for Wednesday and Thursday.
The event is expected to focus heavily on artificial intelligence, smart glasses and virtual reality.
Muse AI Takes Center Stage
Meta’s recently introduced consumer AI assistant, Muse, is expected to be one of the main attractions at Meta Connect.
Unlike standard conversational chatbots, agentic AI systems are designed to complete multi-step tasks with less direct user involvement.
These tasks can include booking travel, managing calendars and completing online purchases.
Investors are increasingly focused on whether agentic AI can create new revenue opportunities for Meta and other major technology companies.
Agentic AI Boosts Chip Stocks
The shift toward agentic AI also supported several semiconductor stocks.
According to Vital Knowledge, earlier generative AI workloads depended heavily on graphics processing units.
Agentic AI, however, may require greater use of central processing units to handle background processes, logic and local data management.
That trend could benefit chipmakers including AMD, Arm and Intel.
Arm, Intel and AMD Surge
Arm and Intel were among the strongest Nasdaq performers on Monday.
Arm shares gained about 15.6%, while Intel rose around 11.7%.
AMD climbed roughly 8.7% after briefly exceeding a $1 trillion market capitalization earlier in the session.
The gains highlighted growing investor enthusiasm around companies expected to benefit from the next phase of AI computing demand.
Oil Prices Fall Despite Middle East Risks
Energy markets moved in the opposite direction.
Oil prices declined despite continued geopolitical tensions in the Middle East.
Fighting between Iran-backed Houthi forces and Saudi-aligned troops reportedly intensified in Yemen over the weekend.
Both sides are competing for strategic territory near the Bab el-Mandeb Strait, a crucial shipping route connecting the Gulf of Aden with the Red Sea.
Bab el-Mandeb Remains Critical for Oil Trade
The Bab el-Mandeb Strait has become increasingly important for Saudi Arabia.
The kingdom has relied more heavily on the route as an alternative channel for crude exports amid disruptions around the Strait of Hormuz.
Any escalation near Bab el-Mandeb could therefore create additional risks for global oil transportation.
However, oil markets reacted more strongly to signs that regional crude exports were improving.
Saudi Oil Exports Recover
Data from shipping analytics company Kpler showed that Saudi oil exports had risen to slightly above 4 million barrels per day in September.
That compared with approximately 2.4 million barrels per day in August.
Saudi Arabia is also attempting to restart flows through its damaged East-West pipeline.
Some analysts remain cautious about how quickly full capacity can be restored.
Gulf Shipping Volumes Improve
The head of U.S. Central Command said that crude oil, cargo and liquefied natural gas shipments through the region had reached their highest levels in six months during the previous two weeks.
The improvement helped ease fears of an immediate supply shortage.
As a result, Brent crude futures fell about 3.5% to $100.27 per barrel.
The contract had traded near $110 per barrel during the previous week.
Lower Oil Prices Support Stocks and Bonds
The decline in oil prices also helped reduce concerns about inflation.
Lower energy costs can ease pressure on central banks to keep raising interest rates aggressively.
That was particularly important after recent interest rate increases by both the Federal Reserve and the Bank of Japan.
Global bond markets, which had been under pressure, also rebounded as oil prices moved lower.
Wall Street Rally Driven by AI and Falling Oil
Monday’s Wall Street rally reflected two powerful themes.
Renewed enthusiasm around artificial intelligence pushed Meta and semiconductor stocks sharply higher.
At the same time, falling crude oil prices reduced some inflation concerns and supported broader risk sentiment.
With Meta Connect approaching and investors watching developments in the Middle East and U.S.-China relations, both technology stocks and energy markets are likely to remain major drivers of Wall Street in the days ahead.
