Wall Street Advances With Broad & Tech Gains

U.S. stocks closed higher to kick off the holiday-shortened trading week, buoyed partly by a continued rebound by technology stocks in a broad advance that saw gains among almost all of the 11 S&P 500 sectors.

The bounce in tech names began late last week and was driven by Micron Technology's blowout forecasts and a cooler-than-expected inflation report, which has left the S&P 500 and Dow less than 1% from their record closing levels ‍set on December 11.

Nvidia shares rose and provided the biggest lift to the benchmark S&P 500. Reuters reported the company has ‍told Chinese clients it aims to start shipping its second-most powerful AI chips to China before the Lunar New Year holiday in mid-February.

Micron climbed while most other chipmakers also advanced.

"I don't necessarily think it's going to go ⁠much higher; it's going to continue to churn," said Ken Polcari, partner and chief market strategist at Slatestone Wealth in Jupiter, Florida.

"Today we're trading higher, but I wouldn't be surprised if we back off again and then we just rally again right into about where ​we are."

According to preliminary data, the S&P 500 gained 43.45 points, or 0.64%, to end at 6,877.95 points, while the Nasdaq Composite rose 121.21 points, or 0.52%, to 23,428.83. The Dow Jones Industrial Average rose 222.65 points, or 0.46%, to 48,357.54.

December has historically been a strong period for stock markets. Since 1950, the Santa Claus rally has ‍been reflected by the S&P 500 rising by an average of 1.3% over the last five trading days of the year and the first ⁠two trading days in January, according to the Stock Trader's Almanac.

This year, that period starts on Wednesday and runs through January 5.

Optimism about AI, signs of a resilient U.S. economy, and expectations for monetary policy easing have outweighed concerns about U.S. tariffs, helping to put the three main U.S. indexes on course for their third consecutive year of gains. The S&P 500 is up 17% on the year.

Most of the 11 S&P sectors traded higher, with financials , ⁠materials and energy among the best performers as commodity prices jumped. ​The tech sector also gained.

THIN HOLIDAY TRADING

Wall Street's fear gauge, the CBOE volatility index, hit its lowest level since December 16, 2024.

Trading volumes were light and were likely to thin out further as the holiday approaches. U.S. ‍stock markets will close at 1 p.m. ET (1800 GMT) on Wednesday and shut on Thursday for Christmas.

However, economic data, including the preliminary reading of third-quarter GDP, December consumer confidence data, and weekly jobless ‌claims, are scheduled for release this week, offering insights about the health of the U.S. economy as well as hints about the monetary policy path.

"Tomorrow's GDP number is going to be the last real piece of economic data that anyone really cares about," said Polcari.

Among other movers, Tesla ⁠gained to touch ​an intraday record high after CEO Elon Musk's ‍2018 pay package was restored by the Delaware Supreme Court. Warner Bros Discovery rose after Oracle co-founder Larry Ellison agreed to provide a personal guarantee of $40.4 billion of the equity financing for Paramount Skydance's offer to acquire the company. Paramount also gained.

Clearwater ‍Analytics Holdings rallied after a group of private equity firms led by Permira and Warburg Pincus clinched a deal to acquire the investment and accounting software maker for about $8.4 billion, including debt.