S&P 500 Hits Record High as AI and Large-Caps Drive Market Rally

The S&P 500 reached a new record high, its first since August 13, as large-cap equities continued their upward trajectory. The index rose 0.6%, while the Nasdaq also hit a record with a 0.5% gain. The Dow Jones Industrial Average added 0.5%, but the small-cap Russell 2000 lagged, falling 0.6% despite a softening in Treasury yields.

Ten of the 11 sectors in the S&P 500 posted gains for a third straight session. Utilities led the way with a 3% surge, followed by Real Estate and Staples, both of which benefited from falling yields. Consumer Discretionary also saw a strong performance, rising 1.4%, while Health Care was the only sector to decline, down 0.2%.

Artificial intelligence (AI) remained a key driver of market momentum. Marvell Technology (MRVL) surged 5.8% after raising its fiscal 2028 revenue outlook, and Advanced Micro Devices (AMD) climbed 2.8% on plans to boost supply in 2027. Other AI-related stocks like Ciena (CIEN) and Corning (GLW) also saw significant gains.

The 10-year Treasury yield fell 4 basis points to 5.27%, easing some of the pressure on rate-sensitive sectors. Economic data showed the August trade deficit widening to its largest since March 2025, driven by higher imports of oil, gold, aircraft, and capital goods. Analysts noted that earnings growth, rather than multiple expansion, has been the primary driver of this year’s market gains.