US stocks closed higher on Monday, with megacap technology shares leading the advance and the Dow Jones Industrial Average setting a record closing high, according to Sina Finance. The Dow rose 693.14 points, or 1.32%, to 53,178.17. The Nasdaq Composite gained 540.04 points, or 2.13%, to 25,913.90, and the S&P 500 added 110.76 points, or 1.48%, to 7,600.48.

Communication services and technology were the main drivers of the rally. Meta Platforms closed up 6%, while Amazon rose 4.6%, lifting its market value to a record $3 trillion. Nvidia gained 3%, and Alphabet and Microsoft each rose about 5%.

The move marked a sharp reversal from technology's turbulent July, when the Technology Select Sector SPDR ETF (XLK) fell nearly 8% as investors worried about corporate spending on artificial intelligence. Jed Ellerbroek, portfolio manager at Argent Capital Management, said investors turned bullish on tech again as corporate earnings beat expectations. "The market is pricing in that big tech capex spending is earnings an attractive return on investment," Ellerbroek said, adding that semiconductor and data-center capex beneficiaries doubled or more in the second quarter, fell sharply in July, but that demand for accelerated computing remains far higher than supply. He said cloud-computing giants are well positioned and semiconductors remain in a rapid-growth mode.

Falling oil prices added momentum. ICE Brent crude fell 4.73% to settle at $83.77 a barrel, while West Texas Intermediate futures dropped 5.11% to $80.34 a barrel. President Donald Trump said over the weekend that he had canceled a planned strike on Iran and that negotiations between the two countries would resume Monday.

Michael Monahan, partner and portfolio manager at Founder ETFs, said signals that the US had backed away from its earlier threats against Iran could also lift stocks, while pressure on AI-related shares showed signs of easing. Treasury yields also fell as inflation concerns eased slightly, with the benchmark 10-year yield sliding 6 basis points to about 4.68%. Adam Crisafulli, founder of Vital Knowledge, wrote that investors were still restraining their enthusiasm because "we've been here before," and the conflict likely has a long way to go before any resolution. Monday was the first trading day of August, with major indexes seeking to stabilize after a turbulent July.