US equities surged as fears of a stagflationary shock eased, driven by lower oil prices and continued optimism around artificial intelligence. The S&P 500 rose by 1.46%, the Nasdaq gained 2.02%, and the Mag 7 advanced 2.00%, with all three indices reaching new record highs [1]. Chipmakers were notable outperformers during the rally, particularly AMD, which saw its shares jump 18.61% following strong earnings and robust demand for AI agents [1]. This performance helped lift the Philadelphia Semiconductor Index by 4.48%, extending its year-to-date gain to 62% [1].
The positive sentiment was not limited to equities. US high-yield credit spreads tightened by 4 basis points, reaching their narrowest level in three months, reflecting increased risk appetite among investors [1]. The rally was attributed to both the easing of stagflation concerns, as indicated by lower oil prices, and the ongoing momentum in AI-related stocks, which continued to attract significant investor interest [1].
No forward-looking statements or analyst opinions beyond the Deutsche Bank commentary on AI momentum and easing stagflation fears were provided in the source [1].
CONCLUSION
The combination of easing stagflation fears and strong AI-driven earnings, particularly from AMD, fueled a broad rally in US equities and risk assets. Record highs in major indices and tightening credit spreads underscore robust investor confidence in the current market environment.