On the 22nd (local time), New York stocks rose across the board as gains in artificial intelligence (AI)-related shares coincided with optimism about the year-end shopping season. In particular, the S&P 500 erased this month's decline and moved close to an eight-month winning streak, the longest since 2018.
On the New York Stock Exchange (NYSE), the large-cap–focused S&P 500 rose 0.6% from the previous session to close higher. Warmth spread across the market, with about 400 of the index's 500 components advancing. The blue-chip Dow Jones Industrial Average rose 228 points, or 0.5%, to 48,362.58, and the tech-heavy Nasdaq also ended up 0.5%.
Mega-cap tech stocks, including the "Magnificent 7 (M7)," led the gains. In particular, Tesla, the flagship electric-vehicle stock, and Nvidia, the leading AI Semiconductor player, drove the advance. Some have recently raised concerns about an AI bubble, but investors instead appear to be renewing their expectations for AI technology's tangible revenue-generating power and future growth.
Experts noted that the rally is not confined to a few names but is spreading across the market. The small- and mid-cap–focused Russell 2000 jumped 1.2% on the day, outpacing large caps. The S&P 500 Equal Weighted Index also rose 0.7%, suggesting that a broad range of corporations, not just select big tech firms, are being fairly valued.
Wall Street experts analyzed that the year-end effect is the key driver of this bull run. Rita Nazareth, a Bloomberg strategist, said, "The optimistic tone coursing through the broader market is fueling year-end buying," and noted, "Concerns about volatility around AI have not completely disappeared, but the tech sector is showing the firepower to lead the market higher again."
Macroeconomic indicators also proved supportive for stocks. The U.S. dollar index, which measures the greenback against six major currencies, fell 0.4% on the day. As the dollar weakened, international oil prices and gold bounced in unison, underpinning risk asset appetite. In the bond market, the 10-year U.S. Government Bonds yield rose 2 basis points from the previous day to 4.17%, and the 2-year, which is sensitive to currency policy by the Federal Reserve, climbed 3 basis points to 3.51%, showing volatility but not denting the broader optimism in equities.
The virtual asset market remained relatively calm. Bitcoin traded little changed around $88,109.68. Ether edged up 0.2% to $2,980.25.
Market participants predicted that with fewer sessions this week due to the Christmas holiday, institutions seeking to lock in year-end revenue will engage in "window dressing" purchases. An official at an asset management firm said, "Investors have begun to put more weight on the possibility of a soft landing than on inflation worries," adding, "Barring any unexpected bad news, the current solid momentum is likely to hold through year-end."