Stocks rose on Monday as optimism over a major regional bank merger and a surge in AMD shares offset concerns surrounding the ongoing government shutdown, now in its second week.
The S&P 500 gained 0.3%, the Nasdaq Composite advanced 0.6%, and the Dow Jones Industrial Average added 55 points, or 0.1%.
AMD jumped more than 30% after announcing a partnership with OpenAI that could see the ChatGPT maker acquire up to a 10% stake in the chipmaker through a warrant structured in tranches.
The deal involves AMD supplying certain graphics processing units over several years.
Nvidia, AMD’s main rival, slipped in premarket trading following the announcement.
Shares of Comerica rallied 16% after Fifth Third Bancorp agreed to acquire the regional lender in an all-stock transaction valued at $10.9 billion.
The combined entity will become the ninth-largest US bank by assets.
The SPDR S&P Regional Banking ETF rose 2% on expectations of further consolidation in the sector.
Investors appeared unfazed by Washington’s budget impasse, even as the shutdown delayed key economic data releases, including the September jobs report that was due Friday.
Several Federal Reserve officials are scheduled to speak this week, including Governor Stephen Miran on Wednesday and Chair Jerome Powell on Thursday.
The S&P 500 and Nasdaq Composite each notched their fourth weekly gain in five weeks last week, rising 1.1% and 1.3%, respectively.
The Dow posted its third positive week in four, also up 1.1%.
Yardeni Research has lifted its year-end target for the S&P 500 back to 7,000, pointing to the resilience of the US economy and improving investor sentiment after President Donald Trump’s move to ease trade tensions.
“We started the year there, but lowered it earlier this year in response to Trump’s Tariff Turmoil,” the firm said in a note.
“We began raising our forecast again during the spring, when we concluded that the tariff issue would no longer impact the stock market by the end of the summer. We bet the resilience of the economy would boost S&P 500 earnings. So far, so good.”
US government shutdown continues
The US government shutdown entered its sixth day on Friday, making it the 10th-longest closure in the country’s history.
Yet, financial markets have so far remained largely steady despite the prolonged political gridlock.
The Senate on Friday rejected both Democratic and Republican funding proposals, failing to break the stalemate.
White House economic adviser Kevin Hassett said layoffs of federal employees would begin if President Donald Trump concluded that negotiations were “going nowhere.”
Despite the impasse, Wall Street ended the week on a positive note, with investors appearing confident that the shutdown will not persist long enough to cause significant economic damage.
Meanwhile, traditional and digital safe-haven assets gained traction, with gold and bitcoin both rising in recent days.
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