S&P 500 logs third straight gain as AI trade fuels optimism

U.S. stocks opened the holiday-shortened week higher on Monday, with gains in artificial intelligence-related shares lifting the broader market.

The S&P 500 advanced 0.64% to close at 6,878.49, marking its third consecutive session of gains. The Dow Jones Industrial Average rose 227.79 points, or 0.47%, to finish at 48,362.68, while the Nasdaq Composite added 0.52% to end at 23,428.83.

AI-linked stocks led the advance. Nvidia climbed more than 1% after a Reuters report said the company plans to begin shipping its H200 chips to China by mid-February. Micron Technology surged about 4%, and Oracle gained over 3%.

Wall Street is coming off a mixed week, though a late rally in technology shares helped both the S&P 500 and Nasdaq post their third positive week in four. The Dow, which has outperformed this month, saw its three-week winning streak come to an end.

Looking ahead, investors are watching whether AI stocks can maintain their leadership into year-end, particularly as concerns over elevated tech valuations prompt rotation into lower-priced sectors. Uncertainty also surrounds the potential for a Santa Claus rally, with the S&P 500 struggling to hold key technical levels.

The New York Stock Exchange will close early at 1 p.m. ET on Wednesday for Christmas Eve and will remain closed on Thursday for Christmas Day.