U.S. equities opened sharply higher Monday, with all three major indexes rising to new intraday highs as investors placed renewed bets on easier monetary policy and a fresh wave of AI-related optimism. The Dow Jones Industrial Average climbed about 0.7 percent to roughly 39,600 points, the S&P 500 added 0.8 percent to near 5,500, and the Nasdaq Composite led gains, advancing 1.1 percent to about 18,700—each touching record levels in early trade.

Technology stocks again led the charge. Nvidia jumped as much as 7.5 percent at the open following reports that the chipmaker will deepen its collaboration with OpenAI to accelerate training of large language models, a development first highlighted by Investopedia and picked up by market participants. Nvidia’s sharp move added significant weight to the Nasdaq, where mega-cap tech names account for a sizable share of the index’s market capitalization.

“Investors are still pricing in a friendlier policy path and a durable earnings tailwind from AI, and Nvidia is the poster child for that convergence,” said Elena Markhova, senior market strategist at Linton Capital. “When a title as central to the AI supply chain reports an operational tie-up like this, it ripples through multiples across the sector.”

The rally came amid a mixed macro backdrop. Bond markets have been volatile in recent sessions as traders parsed a sequence of data points and Federal Reserve signals that have repeatedly nudged expectations for rate cuts. The 10-year Treasury yield ticked down to about 4.30 percent, a move that investors said helped tilt risk-reward in favor of equities after shorter-term rates implied an eventual easing of policy.

Market breadth was positive: more stocks advanced than fell in early action, and cyclical sectors such as industrials and consumer discretionary also participated after several weeks dominated by megacap tech. Financials, which had lagged some of the technology-driven rally in prior months, posted modest gains as well on hopes that a softer inflation trajectory would preserve economic growth without severely denting bank margins.

Analysts cautioned that the move does not eliminate near-term risks. “Records are being made on optimism, not certainties,” said Joshua Meier, chief investment officer at HarborVest Advisors. “Economic data and Fed communications later this week could quickly change the narrative if inflation reaccelerates or jobs data surprises to the upside.”

Corporate earnings continue to be a focal point for investors evaluating whether lofty valuations are justified. This week’s calendar includes several bank reports and additional tech quarterly updates that analysts say will test the sustainability of the market’s advance.

For now, investors appear willing to pay a premium for AI leadership and for signs that the Fed’s tightening cycle is easing. The result was a textbook market rotation in which long-duration, growth-oriented names outperformed as yields cooled and hopes for policy accommodation strengthened market sentiment.