US stocks climbed on Monday, as a Chinese probe weighed on Nvidia (NVDA) in the runup to a pivotal Federal Reserve meeting later this week. The Dow Jones Industrial Average (^DJI) edged up 0.2%, and the S&P 500 (^GSPC) rose 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.45%. The major US stock indexes are coming off a strong week. The Nasdaq notched a fresh record, climbing 2% for back-to-back weekly gains. The S&P 500 rose 1.6%, its best weekly showing since early August, while the Dow sn ...

Group 1: Central Bank Policies - The European Central Bank (ECB) maintained interest rates at 2% and indicated that its rate-cutting cycle is over, with President Christine Lagarde stating that the bank is in a "good place" and risks to the economy have become more balanced [1][5] - The U.S. Federal Reserve is expected to resume rate cuts, with traders increasingly betting on a half-percentage point cut next week due to a significant rise in jobless claims [2][7] Group 2: Market Performance - U.S. stock indices, including the S&P 500, Nasdaq, and Dow, reached record highs, with the Russell 2000 outperforming, rising 1.8% to a new 2025 high [4] - Ten of the eleven S&P 500 sectors experienced gains, with Warner Bros shares soaring 29% and Paramount shares increasing by 15.5% following reports of a cash bid [4] Group 3: Technology Sector Insights - Oracle's share price surged by as much as 43%, raising concerns about whether the U.S. AI stock boom is a bubble, as its valuation reached nearly 50 times estimated forward earnings, the highest since the dotcom crash [12][10] - Nvidia's market capitalization has doubled since April, reaching $4.3 trillion, raising questions about the sustainability of its revenue concentration, with two customers accounting for 39% of its last quarter's revenue [13] Group 4: Market Concentration and Valuations - The combined weighting of the top five companies in the S&P 500 is nearing 30%, indicating a high level of market concentration that historically precedes downturns [14][15] - The S&P 500 tech sector is approaching its most expensive levels since 2002, with significant capital expenditure needed for AI development estimated at $6.7 trillion worldwide by 2030 [16] Group 5: Investor Sentiment - A Bank of America survey indicated that 45% of fund managers consider "long Magnificent 7" the most crowded trade in world markets, with a majority believing there is no AI bubble [17][18]