US stocks close higher on AI, tech gains

By Mucahithan Avcioglu

ISTANBUL (AA) - US stocks closed higher on the first trading day of the week, driven by gains in artificial intelligence (AI) and big tech shares and increased expectations of a Fed rate cut.

The Dow Jones Industrial Average rose 0.44%, or 202.86 points, to close Monday at 46,448.27.

The Nasdaq increased 2.69%, or 598.92 points, to 22,872.01, while the S&P 500 added 1.55%, or 102.13 points, to 6,705.12.

The Volatility Index (VIX), also known as the "fear index," fell 12.42% to 20.52.

As expectations that the Federal Reserve will continue to cut interest rates in December strengthen, stock markets saw a positive course.

The positive market sentiment also supported shares of AI-related technology companies. Broadcom's shares rose 11%, Tesla climbed 6.8%, Alphabet surged 6.3%, Meta rose 3.2%, Amazon added 2.5%, Nvidia gained 2% and Apple was up 1.6%.

New York Fed President John Williams' statement last week that he saw room for another short-term interest rate cut due to the weakening labor market had boosted risk appetite in the markets.

Boston Fed President Susan Collins stated over the weekend that she sees reason to be hesitant about lowering interest rates at the Fed's next policy meeting.

Fed Board Member Christopher Waller expressed his support for a rate cut at the December meeting, citing concerns about the labor market.

San Francisco Fed President Mary Daly also said she believes a sudden deterioration in the labor market is more likely and more difficult to manage than a flare-up in inflation. Daly stated that she supports lowering interest rates next month.

Analysts noted that despite the increasing rhetoric about a rate cut, risks persist for disagreements among members at the Fed's monetary policy meeting next month.