Stock market today: Dow jumps 600 points, S&P 500 and Nasdaq hit records as AI trade fuels rally

May 6, 2026 - 20:48

U.S. stocks closed sharply higher on Monday, with the Dow Jones Industrial Average jumping more than 600 points while the S&P 500 and the Nasdaq Composite both notched fresh record closes. The rally was fueled by a powerful combination of easing geopolitical tensions in the Middle East and a renewed surge of enthusiasm for artificial intelligence stocks.

The broad-based S&P 500 rose 1.2%, crossing the 5,800 mark for the first time. The tech-heavy Nasdaq climbed 1.5%, also hitting an all-time high. The Dow, which had lagged behind the other major indexes in recent weeks, outperformed with a gain of 1.7%, or roughly 610 points.

Investors pointed to reports of a potential ceasefire between Israel and Hezbollah as a key catalyst, which helped calm fears of a broader regional conflict. That relief, however, was quickly amplified by a wave of buying in AI-related stocks. Traders are betting that the next wave of corporate earnings will show massive spending and revenue growth tied to artificial intelligence infrastructure and applications.

Semiconductor stocks led the charge, with Nvidia rising more than 3% and other chipmakers following suit. The rally also lifted major tech names like Microsoft and Amazon, both of which are investing heavily in AI capabilities. Analysts noted that the market is now pricing in a "soft landing" scenario for the economy, where the Federal Reserve successfully tames inflation without triggering a recession, while the AI boom provides an extra engine for growth.

The moves come ahead of a busy week for corporate earnings, with several major banks and tech firms set to report results. The strong market action suggests investors are optimistic that those reports will confirm the AI trade is still the dominant force driving the stock market higher.