The U.S. Stocks rise for a fourth straight day on AI trade

The U.S. stocks rose for a fourth straight session on Tuesday, as artificial intelligence names continued to outperform during a holiday-shortened week.

The S&P 500 was last at session highs, adding 0.3%. The broad market index is now just slightly below its its intraday all-time high of 6920.34, and closing record high at 6901.00. It was last at 6,900.

The Nasdaq Composite climbed 0.4%, as tech names such as Nvidia and Broadcom outperformed. The Dow Jones Industrial Average rose 63 points, or 0.1%.

Traders continued to bet the Federal Reserve will lower its benchmark rate next year even after the release of new economic data that came in well above expectations. The Commerce Department reported that the U.S. economy expanded at 4.3% pace in the third quarter, much better than the 3.2% estimate that economists polled by Dow Jones had forecast.

The report — which was postponed from its planned release date of Oct. 30 because of the record-breaking U.S. government shutdown – initially spooked investors into believing an interest rate cut from the Federal Reserve in early 2026 is less likely. Stocks began the trading day slightly lower but have since recovered.

Fed funds futures traders are still pricing in two rate cuts by the end of next year, the CME FedWatch Tool showed.

“We may not see the market back out of those two rate cuts right now,” said Eric Sterner, chief investment officer at Apollo Wealth Management. “The odds of a rate cut early in the year are probably lower, but we’re soon going to find out who’s Trump’s nomination for the new Fed chair, and it’s almost certainly going to be someone who’s a bit more dovish than Powell.”

The New York Stock Exchange will close early on Wednesday at 1 p.m. ET on Christmas Eve and will be closed Thursday for Christmas Day.