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The S&P 500 reached new heights on Monday, led by a move higher in Nvidia, as a recent partnership announcement with OpenAI fueled investor optimism about the future of artificial intelligence.

The broad market index rose 0.5%, while the Nasdaq Composite jumped 0.6%. The Dow Jones Industrial Average climbed 117 points, or 0.3%. Along with the S&P 500, the Nasdaq and Dow had hit new all-time intraday highs during the session.

The market took a leg higher after Nvidia said it's going to invest $100 billion in OpenAI for the buildout of data centers. The new deal could signify that the AI trade will continue to "drive EPS and share price growth into 2026 and beyond," according to Sam Stovall, chief investment strategist at CFRA Research.

Fellow AI-related name Oracle was also a winner Monday after the software giant announced that it has promoted Clay Magouyrk and Mike Sicilia to co-CEOs as Safra Catz takes a step back to serve as executive vice chair on the company's board. Oracle's climb adds to the stock's sizable 42% run this month.

Apple shares similarly saw a meaningful boost on enthusiasm about new iPhone sales.

That said, the growing risk of a government shutdown is limiting the market's gains. Last week, the Senate rejected Republican and Democratic proposals to at least temporarily fund the federal government. Senate Democratic Leader Chuck Schumer has since urged President Donald Trump to meet with Democrats to strike a deal. The deadline for lawmakers to fund the government is Sept. 30.

The market is coming off a solid weekly advance, with the three major indexes hitting all-time highs and the small-cap Russell 2000 posting its first record close since November 2021 on the heels of the Federal Reserve cutting interest rates for the first time since December. Traders currently expect two more quarter-point rate cuts before year-end, per the CME Group's FedWatch tool.

"Unless something goes to hell in a handbasket in the next three months, basically the markets are telling you that they want to work their way higher and will do so by the end of the year," Stovall also said.

This week, which marks the weakest historically for the S&P 500 based on Citadel data, will bring the latest reading of the Fed's preferred inflation measure, the personal consumption expenditures price index. Economists expect inflation to remain tame enough for the Fed to maintain its current stance on monetary policy.