US stocks closed higher on Wednesday, as the Dow Industrials and S&P 500 registered record closing highs in a broad rally during a holiday-shortened session, reports Reuters.
Indexes have been climbing in recent days, buoyed in part by a rebound in AI-related names after last week's selloff that was triggered by concerns about inflated valuations and high capital expenditures denting profits. Each of the major indexes recorded their fifth straight session of gains.
But recent data showed the economy remains resilient, and the market is still pricing in roughly 50 basis points of rate cuts from the Federal Reserve next year, although expectations for a January cut are low, according to CME's FedWatch Tool.
Data on Wednesday showed new applications for US jobless benefits unexpectedly fell last week.
"Yields are behaving, volume is light, but the same issues remain in place - AI is strong, there is talk of some positives here, new OpenAI and Meta models, that will get the chatter up," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
"The Fed is unlikely to lower rates again, at least for a while. Who knows what happens when May comes and we get a new head of the Fed? But we have a very low probability of a January cut."
The Dow Jones Industrial Average rose 288.75 points, or 0.60%, to 48,731.16, the S&P 500 gained 22.26 points, or 0.32%, to 6,932.05 and the Nasdaq Composite gained 51.46 points, or 0.22%, to 23,613.31.
Trading volumes were thin. The US markets will remain shut on Thursday for Christmas.
Volume on US exchanges was 7.61 billion shares, compared with the 16.21 billion average for the full session over the last 20 trading days.
Micron Technology shares climbed 3.8% to end the session at a closing record of $286.68, continuing their rally after the company issued a strong forecast last week.
Bank stocks also supported gains, and financials were among the best-performing of the 11 S&P 500 sectors, with a 0.5% gain. The energy index was the only sector in negative territory on the day.
