LONDON: Stocks rose on Tuesday, boosted by gains in bitcoin and technology names, as traders tried to recover from a weak start to December Trading.
The Dow Jones Industrial Average gained 188 points, or 0.4%. The S&P 500 climbed 0.4%, while the Nasdaq Composite advanced 0.8%.
Bitcoin rose 6% Tuesday, recouping some of its losses from the prior day. Tech players linked to the artificial intelligence trade supported the broader market as well, with names like Oracle reversing course from the previous session’s losses. AI chip darling Nvidia increased nearly 2%.
AI infrastructure play Credo Technology soared 17% to an all-time high on the back of better-than-expected earnings. Astera Labs followed Credo higher, gaining around 6%.
The major U.S. indexes began the week in the red, ending five-day win streaks on Monday. Risk-off sentiment has pressured the bull market in recent weeks as worries of persistent inflation, elevated valuations and returns on artificial intelligence spending weigh on investors.
Although November was a mixed month for stocks, investors are watching for catalysts that could lead to a year-end rally.
Traders are currently optimistic that the Federal Reserve will announce an interest rate cut on Dec. 10 at conclusion of its next policy meeting. Markets are pricing a more than 87% chance of a cut during the upcoming meeting, which is much higher than the odds from mid-November, according to the CME FedWatch tool.
“Bulls still enjoy a strong tailwind from technical and fundamental factors as we approach year-end. On the technical front, December remains a strong seasonal month, fund flows have been steady, risk metrics have improved, the S&P 500 has surged back above the 50-day moving average, breadth has improved, yet sentiment remains historically weak,” said Mark Hackett, chief market strategist at Nationwide. “The bear’s argument relies on concern over the sustainability of the AI buildout and elevated valuations.”
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