Nasdaq reaches record high close, AI stocks rally

The Nasdaq hit a record high close on September 22, propelled by Micron Technology and other artificial intelligence (AI)-related stocks. The S&P 500 lingered just shy of a record high as oil prices hovered around $100 per barrel. Chip stocks continued their recent upward trend, while consumer-related software shares declined. Investors have been closely watching Meta Platforms' AI assistant, known as Muse, which debuted this month and can handle email and transactions for users.

The assistant's reception has boosted gains for AI-related chip stocks. However, concerns have arisen about whether Muse could compete with retailers, online brokerages, and other consumer companies. Amazon temporarily barred Muse from conducting transactions on its platform on September 21. Industry analysts noted a growing apprehension that Muse might be utilized for managing insurance relationships, travel bookings, and product searches.

Ride-hailing giants Uber Technologies and Lyft experienced a decline, while Expedia and Charles Schwab also saw a drop. Memory chipmakers Micron and SanDisk enjoyed a surge in value. Oil prices remained tepid near $100 a barrel, while the yield on the benchmark 10-year Treasury note stayed around 4.94 percent after U.S. President Donald Trump warned during a UN General Assembly speech that he would "annihilate the Islamic Republic" if a deal to end the Middle East conflict was not reached.

Investors are eagerly anticipating a U.S.-China summit on September 23, expecting the trade truce with Beijing to be extended and discussions to cover AI regulation. According to early data, the S&P 500 slipped 0.43 points, or 0.01 percent, to close at 7,764.27 points, while the Nasdaq Composite gained 121.15 points, or 0.45 percent, to 27,243.24.

The Dow Jones Industrial Average slipped 184.94 points, or 0.36 percent, to 51,863.89. The S&P 500 is trading close to record highs but is valued at just under 19 times expected earnings, its lowest valuation since 2023, based on LSEG data. The recent surge in AI-related stocks has significantly contributed to the increase in expected earnings.