Wall Street experienced significant gains, highlighted by the S&P 500 reaching an all-time high of 6,101 points, closing at 6,086. The Nasdaq Composite surged 1.3% to surpass 20,000, while the Dow Jones rose 0.3%. Technology stocks thrived, driven by a $500 billion AI investment initiative. Notable performers included Nvidia, Oracle, and ARM, which jumped 16%. Despite a slight decline in the Conference Board’s leading indicators, optimism for economic growth remains, with a projected 2.3% GDP increase for 2025.
Wall Street’s Stellar Performance and New Records
The trading session unfolded in a rather predictable manner, with the key developments occurring within the first thirty minutes. The highlight of the day was the S&P 500 reaching a remarkable all-time high of 6,101 points.
By the end of the day, the S&P 500 closed at 6,086 points, marking a gain of +0.61%. Although this closing figure is the second highest in history, falling just short of the 6,090 points achieved on December 8th, it reflects the index’s ongoing strength.
Tech Sector Leads the Charge
The Nasdaq Composite showcased an impressive increase of +1.3%, successfully surpassing the significant milestone of 20,000 points, closing at 20,009. This achievement is the best since December 26th and positions the index just 1% away from its record high of 20,204 points recorded on December 16th.
The Dow Jones Industrial Average saw a modest gain of +0.3%, closing at 44,156 points. In contrast, the Russell 2000 unexpectedly fell by -0.67% to around 2,302 points, a far cry from the 2,450 points it reached on November 25th. This indicates that the anticipated “sector rotation” for 2025 is not materializing, as artificial intelligence continues to attract substantial global investments.
Wall Street is now positioned close to its historical peaks, driven by the robust performance of technology stocks amidst a climate of optimism surrounding a massive $500 billion investment initiative in artificial intelligence. This plan, dubbed ‘Stargate,’ aims to establish 20 new large-scale data centers across the United States over the coming years.
Nvidia, the company responsible for equipping these data centers, experienced a significant surge of +4.4%, reaching $147, further extending its lead over Apple, which has a market capitalization of $3.6 trillion. Microsoft is making a strong comeback in the race for second place, gaining +4.1% and reaching a market cap of $3.33 trillion, while Apple is lagging with a modest +0.5% increase and a market cap of $3.37 trillion. The competition is tight, as Apple could potentially slip from first to third place within a week.
In addition, notable gains were observed in Oracle (+7.7%) and Cadence Design (+3.3%), while chipmaker ARM experienced an extraordinary leap of +16%, closing at $180. In comparison, Netflix only managed a modest increase of +9.7% to $954.
On the macroeconomic front, there were few significant market movers aside from the Conference Board’s leading indicators index, which is designed to forecast future economic activity in the United States. The index fell by 0.1% to 101.6 last month, aligning with economists’ expectations. In November, the index had risen by 0.4%, marking its first recorded increase since February 2022.
Despite the decline in December, the Conference Board remains optimistic, projecting strong growth momentum in the United States at the start of the year, with a GDP increase of 2.3% anticipated for 2025. Investors are banking on tax cuts and deregulation measures promised by the new administration, although some uncertainty lingers regarding the implementation of tariffs, which could have inflationary effects.
Lastly, in a somewhat anecdotal note amid the celebration of the S&P’s all-time high and ARM’s impressive surge, the yield on ten-year Treasuries increased by +4 basis points to 4.614%, while the yield on thirty-year bonds rose by +2.5 basis points to 4.827%. While these developments did not impact today’s trading significantly, they could become a concern if U.S. indices fail to maintain their highs by the end of the week.