Stocks Close Higher as Nvidia–Intel Pact Sparks Tech Rally, AI Optimism Lifts Sentiment

U.S. stocks advanced Thursday, buoyed by a semiconductor shake-up and renewed enthusiasm for artificial intelligence. The Dow Jones Industrial Average rose 123.92 points, or 0.27%, to finish at 46,142.2. The S&P 500 gained 31.60 points, or 0.48%, closing at 6,631.95. The Nasdaq Composite led the charge, up 209.40 points, or 0.94%, to 22,470.7. Small-cap stocks also surged, with the Russell 2000 climbing 2.49% to 244.85.

Technology shares set the pace after Nvidia unveiled a $5 billion equity investment in intel , securing more than a 4% stake in the chipmaker. The two rivals announced a sweeping partnership to co-develop custom processors for data centers and PCs, combining Nvidia’s strength in accelerated computing with Intel’s x86 architecture. Intel shares soared more than 30% during the trading day, breaking through a long-watched resistance level, while Nvidia stock advanced nearly 4%, recovering from recent weakness tied to Chinese restrictions on AI chips. Advanced Micro Devices tumbled more than 5% as investors weighed the potential of a stronger joint competitor.

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At the heart of the deal is a co-development roadmap that leverages Nvidia’s NVLink interconnect with Intel’s manufacturing capabilities, a move seen as enhancing supply chain resilience while expanding the combined ecosystems of both companies. Nvidia CEO Jensen Huang called the alliance “historic,” saying it could usher in “the next era of computing.” Intel CEO Lip-Bu Tan said the pact validates Intel’s x86 platform and advanced packaging technologies.

Beyond semiconductors, investors drew confidence from signs of long-term momentum in artificial intelligence adoption. A new report from the Bank of America Institute e of “agentic AI”—autonomous, goal-driven systems expected to reshape enterprise workflows. International Data Corporation predicts that by year-end, half of organizations will be using enterprise AI agents, while BofA Global Research estimates the total addressable market could reach $155 billion by 2030.

The combination of blockbuster corporate news and broader AI optimism helped offset lingering concerns about global growth. Thursday’s gains placed the Nasdaq within striking distance of its summer highs, with analysts pointing to the tech sector’s renewed leadership. For now, Wall Street is betting that strategic alliances and next-generation AI adoption will continue to drive momentum into the fall.