The S&P 500 closed higher on Monday, lifted by gains in chipmakers and other companies related to artificial intelligence, while smaller companies also rose sharply.

The Russell 2000 index jumped about 1 percent, with the small-cap index significantly outperforming the S&P 500 and Nasdaq so far in 2026.

Alphabet rose 1.9 percent to a record high and Amazon added 1.5 percent. Both companies are set to report quarterly results this week, giving investors an additional glimpse of the race to dominate AI technology.

AI-related data firm Palantir climbed 0.8 percent ahead of its quarterly report after the bell.

Chipmakers benefiting from AI-related demand for their components also rallied. SanDisk surged 15.4 percent, while Advanced Micro Devices rose 4 percent and Micron Technology added 5.5 percent.

It was the S&P 500's first gain in three sessions following recent worries about pricey valuations of technology companies whose ⁠shares have soared in recent years on optimism about AI.

The S&P 500 is up about 2 percent in 2026, lagging the Russell 2000's more than 6 percent rally.

Investors often view gains in small-cap stocks as a reflection of confidence in the economy.

"The fundamentals are good and earnings are strong. We have positive surprises both for revenues and earnings, pretty much across the board," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

Analysts expect S&P 500 companies to have grown their earnings nearly 11 percent in the December quarter, up from an estimate of about 9 percent at the start of January, according to LSEG.

Technology-related companies are driving most of that growth.

Walt Disney tumbled 7.4 percent, despite posting quarterly earnings above Wall Street expectations, as it warned of a decline in international visitors to its US theme parks and a slump in earnings at its TV and film division.

The S&P 500 rose 0.5 percent, to 6,976. The Dow rose 1.1 percent, to 49,407, while the Nasdaq rose 0.6 percent, to 23,592. (Reuters)