Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 29, 2025. REUTERS/Brendan McDermid

By Stephen Culp

NEW YORK (Reuters) -The S&P 500 and the Nasdaq closed higher on Monday, with artificial intelligence-related deals driving much of the gains even as the Federal Reserve's near-term monetary policy grew increasingly foggy due to scarcity of official U.S. economic data.

Tech and tech-related firms helped boost the Nasdaq to the biggest gain. Healthcare companies UnitedHealth Group UNH.N and Merck MRK.N, falling 2.3% and 4.1%, respectively, held the Dow in negative territory.

Among the major drivers to the upside, Amazon announced it struck a $38 billion deal with OpenAI to allow the ChatGPT maker to run and scale its artificial intelligence workloads on Amazon Web Services' cloud infrastructure. Amazon's stock advanced 4.0%.

Nvidia shares gained 2.2% after U.S. President Donald Trump said the AI chipmaker's most advanced microchips will be reserved for U.S. companies and kept out of China and other countries.

Over the weekend, the White House released details about the agreement reached by U.S. President Donald Trump and Chinese President Xi Jinping to de-escalate the trade war between the world's two biggest economies.

"The Amazon deal and other M&A news have boosted the market, and then you know we came into the week after getting marginally positive news over the weekend, both about the China trade situation and some dovish Fedspeak," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.

"(But) it's definitely a market led by big tech semiconductors and it has been for almost this entire bull market."

Kimberly-Clark shares slid 14.6% after it was revealed the consumer goods company will buy Tylenol maker Kenvue for more than $40 billion. Kenvue advanced 12.3%.

While official economic data remains scarce amid the ongoing government shutdown, the Institute for Supply Management and S&P Global released their purchasing managers' indexes, which showed U.S. factories continue to grapple with uncertainty stemming from Trump's tariff policies.

The U.S. Supreme Court is expected to hear arguments pertaining to the legality of Trump's tariffs on Wednesday.

In the wake of last week's expected interest rate cut, the Fed's next move has become increasingly unclear given the lack of economic indicators due to the ongoing government shutdown.

Payrolls processor ADP's National Employment index, expected on Wednesday, could shed light on the state of the U.S. labor market.

Fed officials offered conflicting viewpoints, with Fed Governor Stephen Miran making the case for additional rate cuts, but Chicago Fed President Austan Goolsbee said he was leery of additional cuts while inflation remains well above the central bank's 2% annual target.

The Dow Jones Industrial Average fell 226.19 points, or 0.48%, to 47,336.68, the S&P 500 gained 11.77 points, or 0.17%, to 6,851.97 and the Nasdaq Composite gained 109.77 points, or 0.46%, to 23,834.72.

Of the 11 major sectors in the S&P 500, consumer discretionary enjoyed the largest percentage gains, while materials suffered the biggest decline.

Third-quarter earnings season is well underway, with well over 300 of the companies in the S&P 500 having reported. Of those, 83% have beaten analysts' estimates, according to the most recent LSEG data.

Declining issues outnumbered advancers by a 1.34-to-1 ratio on the NYSE. There were 202 new highs and 142 new lows on the NYSE.

On the Nasdaq, 1,799 stocks rose and 2,887 fell as declining issues outnumbered advancers by a 1.6-to-1 ratio.

The S&P 500 posted 16 new 52-week highs and 32 new lows while the Nasdaq Composite recorded 74 new highs and 181 new lows.

Volume on U.S. exchanges was 19.62 billion shares, compared with the 21.11 billion average for the full session over the last 20 trading days.

(Reporting by Stephen Culp; Additional reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Richard Chang)