US Markets Hit Record Highs Driven by AI Investment Surge

The United States stock market achieved a historic milestone on Tuesday, with the benchmark S&P 500 closing 0.58 percent higher to surpass its previous peak set in mid-August. The rally was largely propelled by sustained investor enthusiasm for artificial intelligence, helping the index gain 14 percent year-to-date despite facing headwinds from elevated oil prices and a sell-off in US government bonds.

The Nasdaq Composite, which carries a heavier weighting toward technology shares, also recorded a record close, rising 0.45 percent. Among the so-called “Magnificent Seven” tech giants, all but Meta saw gains. Amazon led the group with a 1.95 percent increase, followed by Microsoft at 0.78 percent and Tesla at 0.51 percent. Apple and Alphabet each rose 0.22 percent, while Nvidia added 0.14 percent. Meta, however, dipped 0.41 percent, erasing some of the momentum gained since its new AI assistant, Muse, was launched last month.

Other notable movers in the sector included Marvell Technology, which surged 5.81 percent, and Cisco, which climbed 4.54 percent.

Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services, characterized the current market momentum as a “technology and AI surge.” He noted that technology and communication services were the only two S&P 500 sectors to post gains last month, while the remaining nine declined.

“Every bull market has a dominant theme, and technology and AI remain this market’s dominant theme,” Lerner told Al Jazeera. He added that Wall Street has largely ignored broader economic challenges, including the energy crisis stemming from the US-Israeli war on Iran and mounting government debt, thanks to multibillion-dollar investments in AI by hyperscalers.

The S&P 500 is now poised to secure its fourth consecutive year of double-digit returns, with the Nasdaq Composite up 18.78 percent in 2026. Lerner suggested the rally could extend through the end of the year, citing historical trends. He pointed out that since 1950, the fourth quarter of midterm-election years has averaged a 7 percent gain and been positive 84 percent of the time.

While acknowledging that rising interest rates present the primary risk to the upward trajectory, Lerner concluded that the evidence suggests further upside potential for the bull market.

Conversely, Asian markets retreated on Wednesday. Key indexes in Japan, South Korea, and Hong Kong fell as traders assessed the impact of fighting between forces aligned with Yemen’s recognized government and Iran-backed Houthis. Oil prices, already high due to the conflict with Iran, rose further, with Brent crude futures for December delivery reaching $101.45 a barrel, up 0.87 percent. The Nikkei 225 dropped 0.79 percent, the Kospi fell 1.36 percent, and the Hang Seng Index slipped 0.71 percent as of 02:30 GMT.