The tech-heavy Nasdaq led Wall Street's main stock indices higher on Monday, with Meta among the top gainers after a report said the megacap was prepping for sweeping AI-related layoffs, even as a raging Middle East conflict kept risk-taking in check.
Meta gained 2.4% after a Reuters report said it was planning to shrink its workforce by 20% or more to offset costly artificial intelligence infrastructure bets and prepare for greater efficiency brought about by AI-assisted workers.
The Instagram parent joins Amazon.com and Block, which made similar announcements earlier this year.
AI is expected to stay in the spotlight this week, with chip giant Nvidia's annual developer conference scheduled later in the day, while Micron will report results.
Electronics giant Taiwan's Foxconn also issued a strong quarterly revenue forecast.
Nvidia gained 2.3%, while Micron climbed 6.3% after the company announcing plans for a second manufacturing facility in Taiwan. Tesla also rose 2.1% as Elon Musk said the company's Terafab project to makeAI chips will launch in seven days.
Ten of the 11 S&P 500 sectors were higher, with tech leading with a 1.4% rise."If we had a very extended conflict (in the Middle East), there are certain aspects to the AI capex story that could be impeded if there wasn't enough energy and if there wasn't enough delivery of the chips and everything that was needed," said Steve Edwards, senior investment strategist at Morgan Stanley Wealth Management.
Edwards added that investors were still not fully pricing in the full impact of the conflict.Crude prices were hovering near US$100 a barrel, as shipments through the Strait of Hormuz remained largely shut and US President Donald Trump's push for a coalition to secure safe passage seemed to be in vain.
The impact of higher energy costs is likely to feature prominently in central bank meetings globally this week, with the Federal Reserve also weighing tariff costs and signs of a weakening jobs market.
The Fed is widely expected to leave rates unchanged at the end of its two‑day meeting on Wednesday, and traders have pushed back their expectations for an interest rate cut of at least 25 basis points to only after October, according to LSEG-compiled data, from the previous expectation of July.
At 9:59am ET, the Dow Jones Industrial Average rose 567.94 points, or 1.23%, to 47,126.41, the S&P 500 gained 83.62 points, or 1.27%, to 6,716.23, and the Nasdaq Composite gained 305.
90 points, or 1.38%, to 22,411.26.Wall Street's fear gauge, the CBOE volatility index, dropped 2.78 points to 24.41, while the rate-sensitive Russell 2000 index gained 1.6%.
Wall Street's main indices have been fraught with volatility since the war began as traders tried to gauge its repercussions on the economy.
Despite logging declines over the past three weeks, US equities have fared better than global peers, buoyed by a rebound in beaten-down technology stocks and as the country is a net oil exporter.
On the data front, February industrial production increased 0.2%, slightly better than expectations of 0.1%.
Elsewhere, top US and Chinese economic officials were due to conclude talks in Paris and further talks are expected to be held between President Donald Trump and Xi Jinping in Beijing, sources familiar with the discussions said.
Energy stocks Occidental and ConocoPhillips traded 0.5% lower, while travel stocks Delta and Norwegian Cruise gained 2.8% and 3%, respectively.
Crypto stocks such as Strategy added 5.3% as bitcoin rallied over 2.7%.Discount retailer Dollar Tree gained more than 2% in choppy trading after quarterly results and forecasts.
Advancing issues outnumbered decliners by a 5.53-to-1 ratio on the NYSE and by a 3.52-to-1 ratio on the Nasdaq.
The S&P 500 posted 12 new 52-week highs and two new lows, while the Nasdaq Composite recorded 27 new highs and 65 new lows.
-The Edge Communications Sdn