By Johann M Cherian and Tharuniyaa Lakshmi
Sept 21 (Reuters) - Wall Street's main indexes rose on Monday, powered by AI gains as Treasury yields eased and crude prices tumbled more than 3% to hit an 11-day low on hope of progress in Middle East negotiations during the UN meeting this week.
Doomsday warnings from the leaders of AI giants a week ago had led to a selloff, but the mood seemed lighter as investors focused on signs that spending on developing the technology was still expanding.
Chip companies
such as Intel rose 9%. Advanced Micro Devices surged 8.5% to become the latest chipmaker to reach $1 trillion in market valuation and Micron also gained 3%.
Meta soared 6.2% to a more than seven-month high after brokerage Wells Fargo hiked its price target on the stock, while Accenture gained 3.5% after partnering with Anthropic to invest $2 billion in AI evaluation.
"The excitement in the build-out and adoption of AI has really driven a lot of the growth in corporate profits and a lot of the gains in the stock market over the past few years," said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
"Is there going to be a trade-off between safety and productivity benefits? That argument is going to continue for many months to come, if not many years."
While Washington and Tehran continued to exchange new threats through the weekend, US President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected at the UN General Assembly in New York this week.
A fall in oil prices eased the pressure on equities as the 10-year US bond yield slipped below the critical 5% mark.
Still, investors were wary of the interest-rate outlook after a recent pickup in inflation prompted the US Federal Reserve to raise rates for the first time in three years. Markets see a 50% chance of another hike next month, CME's FedWatch showed.
Commentary from at least 10 central bank policymakers is due this week.
Chicago Fed President Austan Goolsbee said there was "no ambiguity" about the need for higher interest rates, with inflation pressures now moving beyond tariffs and energy prices to strong demand.
At 10:24 a.m. ET, the Dow Jones Industrial Average rose 241.25 points, or 0.47%, to 51,923.89, the S&P 500 gained 70.38 points, or 0.92%, to 7,720.88, and the Nasdaq Composite added 393.21 points, or 1.48%, to 26,915.76.
Seven of the 11 S&P 500 sectors were trading higher. Communication services was in the lead with a 2.3% rise, while energy led declines.
A diplomatic breakthrough between the United States and Denmark over the weekend over the status of Greenland also aided sentiment and was likely to allay trade tensions between the countries.
US-listed shares of companies exposed to Greenland rose. Critical Metals soared 35%, while Greenland Mines and Greenland Energy each more than doubled in value.
The China-US summit on Thursday could touch upon topics including potentially extending the trade truce between the two superpowers, the Iran war, as well as regulation on AI advances.
Scott Bessent and Chinese Vice Premier He Lifeng concluded talks on Sunday during which the US Treasury secretary proposed a new mechanism for AI safety notifications.
Bitcoin, a key marker for risk appetite, rose 5.3% to hit a more than seven-month high, lifting Coinbase and Strategy 5% and 8%, respectively.
Paramount Skydance gained 6.5% after a report said the company reached a settlement with California and other states suing to block its $110 billion merger with Warner Bros Discovery.
Advancing issues outnumbered decliners by a 1.61-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq.
The S&P 500 posted 4 new 52-week highs and 22 new lows, while the Nasdaq Composite recorded 30 new highs and 66 new lows.
(Reporing by Johann M Cherian and Tharuniyaa Lakshmi in Bengaluru; Editing by Mrigank Dhaniwala and Pooja Desai)
