S&P 500, Nasdaq Inches Higher As AI Stocks Recover From Last Week's Selloff

This article first appeared on GuruFocus.

Sep 29 - The S&P 500 edged slightly higher on Monday, adding 0.2%, while the Nasdaq Composite climbed 0.5% and the Dow Jones Industrial Average hovered near flat levels.

Investors looked to regain momentum after a tough week for the artificial intelligence trade.

Nvidia (NASDAQ:NVDA) gained 2% as sentiment around AI spending steadied following recent doubts about infrastructure capacity and energy demands tied to its partnership with OpenAI. Advanced Micro Devices (AMD) and Micron Technology (MU) also moved higher, rising 2% and 3% respectively.

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Video game publisher Electronic Arts (EA) jumped 4% after announcing a $55 billion take-private deal. According to Goldman Sachs, U.S. merger activity has already topped $1 trillion this year, up 29% compared to last year.

Despite last week's pullback, analysts remain optimistic. Barclays strategist Venu Krishna noted that capital expenditures tied to AI infrastructure remain strong and continue to support broader markets, though he cautioned about the risks of market concentration.

Markets are also keeping a close eye on the potential U.S. government shutdown, which could delay key economic data releases and complicate the Federal Reserve's policy outlook.

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