Stocks rose as a result of a rise in megacaps on optimism that the artificial-intelligence boom will continue to boost market gains.
Traders ignored any concerns about Friday's US jobs report, reigniting the trade that has driven the Nasdaq 100 up more than 45% this year. Optimism about AI resurfaced, with Alphabet up nearly 5.5% a day after Google released Gemini, the "largest and most-capable AI model" it has ever built. Advanced Micro Devices also rallied after pledging its new accelerator chips will run AI software faster than rival products.
The Nasdaq 100 jumped 1.5%, and the S&P 500 ended a three-day decline. Treasuries witnessed tiny swings, with the 10-year yield creeping higher to roughly 4.15%. The yen surged nearly 2.5%, while the dollar declined.
In a week jam-packed with labor-market data, continuing claims for US unemployment benefits decreased by the most since July, although remaining around a two-year high amid rising evidence of a cooling labour market.
Optimism about disinflation and potential rate cuts next year played a big role in the recent stock rally, but a reading of cross-asset volatility shows risks are not as muted as they appear. The gap between the MOVE Index, which tracks interest-rate volatility, and the VIX index of stock price swings has widened again, implying rate markets remain choppy and could spark stress for equities at any time.