The S&P 500 closed 0.58 percent higher, topping the previous peak reached in mid-August. The tech-heavy Nasdaq Composite also set a new record, finishing up 0.45 percent.
Tech stocks led the gains, with most members of the so-called "Magnificent Seven" posting increases. Amazon climbed 1.95 percent, while Microsoft and Tesla rose 0.78 percent and 0.51 percent, respectively. Apple and Alphabet each gained 0.22 percent, and Nvidia added 0.14 percent. Meta, which has risen more than 20 percent since the launch of its Muse AI assistant last month, bucked the trend with a 0.41 percent decline.
Other notable gainers included Marvell Technology, up 5.81 percent, and Cisco, which rose 4.54 percent.
Keith Lerner, chief investment officer and market strategist at Truist Advisory Services in Atlanta, Georgia, described the rally as a "technology and AI surge." He told Al Jazeera: "Every bull market has a dominant theme, and technology and AI remain this market's dominant theme." Lerner noted that technology and communication services were the only S&P 500 sectors to rise last month, while the other nine declined.
The rally has persisted despite headwinds including the energy crunch caused by the US-Israel war on Iran and a sell-off in government bonds linked to rising national debt. The S&P 500 has gained 14 percent so far in 2026, while the Nasdaq is up 18.78 percent.
Lochlan Halloway, a senior equity strategist at Morningstar Australia, said: "Investors remain bullish on the prospects for AI. They are betting that the money pouring into data centres will earn a good return, and so far, that belief has outweighed rising interest rates, more expensive oil and a 10-year bond yield above 5 percent."
Halloway added: "We are positive on AI too, but the range of outcomes is wide, and the market is concentrated in a handful of companies, so the outlook for US shares, and by extension global shares, relies on the AI story continuing to deliver."
Lerner said the rally could continue through the end of the year based on historical trends and expectations for strong corporate earnings, though he cautioned that a pullback could still occur.