The Magnificent Seven is back. You can thank Meta.
Investors piled into shares of Facebook's parent company on Monday after its new artificial intelligence agent jumped to the top of Apple's App Store, boosting shares 11% and extending a tech rally that left the recent freakout over AI safety in the dust.
Meta's surge marked its largest one-day percentage gain in more than a year and added $192 billion to the company's market value. It also pushed an exchange-traded fund linked to the Magnificent Seven group of tech giants to its first record since May.
Wall Street has at times seen Meta as a potential weak spot in the AI trade, with analysts struggling to square how the company's massive capital investments would yield returns. But the buzzy launch of Muse, a free AI assistant that offers paid tiers for heavy users, appeared to offer an avenue for growth.
Muse is Meta's most consequential consumer product in years, Truist analyst Youssef Squali recently told clients, calling it "the clearest attempt yet to build a non-[advertising] revenue stream."
On Monday, the six other Magnificent Seven names also finished in the green.
Wall Street's renewed AI optimism lifted data-center developers and suppliers, propelling Intel shares 12% higher and boosting Advanced Micro Devices by 10%. AMD notched a $1 trillion market capitalization for the first time, becoming the 14th U.S. company to do so.
Investors' move to take on more risk even extended to bitcoin, which continued a recent price run-up to reach roughly $86,000 for the first time since January. The digital token's rally helped lift shares of crypto companies, including Strategy. The bitcoin-hoarding company jumped 9.5%.
The Nasdaq composite rose 2.3%, logging its third straight gain to close at a record high. The S&P 500 climbed 1.5% while the Dow Jones Industrial Average ticked 0.7% higher, gaining 366 points.
A slide in oil prices provided some breathing room for tech stocks' takeoff. After the temporary shutdown of a Saudi Arabian pipeline helped push prices to some of their highest levels of the year, Brent crude futures on Monday retreated for the fourth session in a row, falling 3.4% to $100.34 a barrel.
American officials and outside analysts say tanker traffic through the Strait of Hormuz has picked up somewhat in recent weeks, thanks in part to so-called dark transits in which ships turn off tracking signals. A gathering of global leaders for the United Nations General Assembly in New York this week has also momentarily rejuvenated hopes for diplomacy in the Middle East and Ukraine, as well as shared AI guardrails between the U.S. and China.
Still, the possibility of renewed hostilities that could snarl shipping routes and fuel refineries has left traders on edge. Bond yields were mixed Monday, with the 10-year Treasury inching lower to 4.962%, while investors priced in a high likelihood of at least one more interest-rate hike by the Federal Reserve this year.
Even if inflation remains high and the central bank continues to raise borrowing costs in the months ahead, that may not be enough to dampen the AI-crazed stock market in the short term, said Brad Conger, chief investment officer at Hirtle & Co.
"The only conclusion you can draw is that the equity market is looking through it," he added.