U.S. stocks are starting the week higher as investors digest falling oil prices, easing Treasury yields, a renewed rally in artificial intelligence stocks and major developments surrounding the proposed Warner Bros. Discovery and Paramount Skydance merger.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all moved higher Monday morning, reversing some of the pressure from last week’s volatile trading. The Nasdaq was leading the advance, while semiconductor stocks posted some of the market’s largest gains.

At the same time, investors remain focused on the Federal Reserve’s interest-rate outlook, elevated oil prices, geopolitical developments and this week’s planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping.

AI Stocks Lead a Broad Market Rebound

Artificial intelligence stocks are once again at the center of Wall Street’s attention.

Shares of NVIDIA ($NVDA), AMD ($AMD), Intel ($INTC) and Micron Technology ($MU) all advanced as investors returned to semiconductor stocks.

According to Reuters, Intel gained roughly 13% in Monday trading, while AMD climbed more than 9% and reached a market valuation of approximately $1 trillion. Micron also gained, while Nvidia advanced more modestly.

The rebound comes after concerns about the pace and economics of AI development pressured technology stocks earlier in September. Investors had reacted to warnings from several AI industry leaders about the risks and sustainability of rapid AI development.

Fresh evidence of continued AI spending has helped ease some of those concerns. The renewed buying suggests that investors are again focusing on the amount of capital being committed to computing infrastructure and AI systems rather than solely on recent warnings about the technology’s development.

Oil Prices Fall Below $100 as Geopolitical Concerns Ease

Oil is providing another important signal for markets today.

Brent crude fell more than 3% Monday, trading around $100 per barrel, while U.S. crude also declined. The move followed reports of increased oil shipments from the Gulf and renewed expectations for diplomatic discussions involving the United States and Iran.

The decline is significant because elevated oil prices have been contributing to renewed inflation concerns.

Oil had recently approached $110 per barrel amid geopolitical tensions, increasing concerns that higher energy costs could make it more difficult for central banks to bring inflation lower. Monday’s retreat therefore provided some relief to both equity and bond markets.

However, oil remains substantially higher than earlier this summer. AP reported that Brent was around $100.29 on Monday, compared with approximately $72 per barrel earlier in the summer.

Treasury Yields Retreat From the 5% Level

Bond markets are another major driver of today’s stock market move.

The U.S. 10-year Treasury yield recently moved back below 5%, falling to roughly 4.96% after briefly reaching 5.01%. The retreat has helped ease some of the valuation pressure facing growth and technology stocks.

The move comes only days after the Federal Reserve raised interest rates and indicated that additional tightening could be necessary as inflation remains elevated.

Higher Treasury yields can make stocks, particularly high-growth technology companies, less attractive relative to fixed-income investments. Lower yields can have the opposite effect by reducing the discount rate investors apply to future corporate earnings.

That dynamic is particularly relevant for large technology companies whose valuations are heavily influenced by expectations for future growth.

Federal Reserve Remains a Major Market Risk

Despite Monday’s rally, interest rates remain one of the biggest issues facing investors.

The Federal Reserve’s latest rate increase was followed by a rise in Treasury yields and expectations that additional increases could be necessary. Reuters reported that futures markets were pricing roughly even odds of another rate increase in October, while the probability of another increase by year-end was substantially higher.

That creates a difficult backdrop for equities.

Investors are simultaneously dealing with higher energy prices than earlier in the year, persistent inflation concerns and a Federal Reserve that has signaled a willingness to maintain tighter monetary policy.

The direction of oil prices and upcoming economic data could therefore have an important influence on how markets interpret the Fed’s next moves.

Warner Bros. Discovery and Paramount Merger Takes Center Stage

One of Monday’s biggest individual stock stories is unfolding in the media sector.

Warner Bros. Discovery ($WBD) and Paramount Skydance ($PSKY) surged after reports that Paramount had reached a settlement with California and other states that had challenged its proposed acquisition of Warner Bros. Discovery.

Reuters reported that the settlement clears a major legal hurdle for the proposed $110 billion transaction. The agreement reportedly includes independent editorial boards for CNN and CBS, along with a $30 million penalty for each film below Paramount’s commitment to release 30 movies annually.

Warner Bros. Discovery shares were up more than 10% at one point Monday, while Paramount also posted a significant gain.

The proposed transaction would combine major film, television and streaming assets and would represent one of the largest deals in the entertainment industry.

The settlement does not mean every remaining step of the transaction has been completed. Investors will continue watching regulatory, shareholder and closing requirements as the companies work toward completing the deal.

Bitcoin Rebounds Alongside Risk Assets

Cryptocurrency markets are also contributing to Monday’s risk-on tone.

Bitcoin moved above $85,000, reaching its highest level since January, according to market reports. The move helped lift cryptocurrency-related equities including Coinbase ($COIN), Robinhood Markets ($HOOD) and Strategy ($MSTR).

Strategy was among the more notable gainers as investors moved back into cryptocurrency-related assets.

The simultaneous gains in technology stocks, cryptocurrencies and equities indicate a broader improvement in risk appetite compared with the more defensive trading environment seen during portions of last week.

Trump-Xi Meeting Adds Another Major Catalyst

Markets are also looking ahead to the planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week.

Trade policy and artificial intelligence are expected to be among the subjects discussed. Treasury Secretary Scott Bessent has described preliminary U.S.-China discussions as successful, while investors are watching for developments related to tariffs and cooperation on AI.

Several major technology executives are also expected to participate in events surrounding the visit, including leaders from Nvidia, Microsoft, Apple and Qualcomm.

For markets, the outcome could have implications for technology supply chains, semiconductor companies and the broader U.S.-China trade relationship.

Stocks to Watch This Week

The remainder of the week includes several developments that could influence market direction.

Costco Wholesale ($COST) is scheduled to report quarterly results Thursday. Investors will be watching sales, membership trends and the effect of tariffs and consumer spending on margins.

Meta Platforms ($META) is also holding its annual Connect event, putting the company’s AI strategy and product development back in focus.

Meanwhile, investors will continue monitoring semiconductor stocks following Monday’s sharp gains, particularly Nvidia, AMD, Intel and Micron.

The combination of corporate earnings, Federal Reserve policy expectations, oil prices and U.S.-China negotiations creates several potential market-moving catalysts for the remainder of the week.

What Matters Most for the Stock Market Today

Monday’s market action is being driven by several interconnected themes.

Lower oil prices are reducing some inflation pressure. Falling Treasury yields are providing relief to growth stocks. Renewed enthusiasm for AI is lifting semiconductor shares, while developments surrounding the Warner Bros. Discovery and Paramount transaction are driving major moves in media stocks.

At the same time, the Federal Reserve’s rate path remains uncertain, oil prices remain elevated compared with earlier in the year and geopolitical risks have not disappeared.

For investors watching the market this week, the key indicators are likely to be Treasury yields, crude oil prices, semiconductor stocks, Federal Reserve commentary, corporate earnings and developments in U.S.-China trade discussions.

The market’s ability to sustain Monday’s gains will depend on how those factors evolve as the week progresses.