The S&P 500 and Nasdaq closed at record highs following a rally among AI chipmakers and a dip in US treasury yields. At market close, the S&P 500 rose by 0.58%, surpassing 7,800 for the first time in history. The tech-heavy Nasdaq index increased by 0.45%, while the Dow, slightly down from its record high in August, climbed by 0.49%.

Investor Optimism

Investors showed optimism after recent developments for chipmakers such as Marvell Technology, Advanced Micro Devices, and Broadcom, which indicated growth in the markets for chips used to power AI. Wall Street has also become more hopeful that the US Federal Reserve will keep interest rates unchanged at its next board meeting in October.

Labor Market Concerns

Despite the stock market's optimism, job figures from September revealed underwhelming growth in the labor market. Multiple Fed officials have suggested that the next interest rate increase can likely wait. This optimism in the stock market, driven by ongoing investment in AI, has persisted despite other signs of instability in the US economy and global politics.