U.S. stocks reached new record highs on Tuesday as investors continued piling into AI-related trades ahead of the Federal Reserve’s rate decision.
The S&P 500 rose 0.23% to close at 6,890.89, briefly surpassing the 6,900 level intraday. The Nasdaq Composite climbed 0.80% to 23,827.49, while the Dow Jones Industrial Average gained 161.78 points (0.34%) to 47,706.37 — all marking fresh record closes.
Nvidia led market gains, jumping about 5% after announcing a $1 billion investment in Nokia and expanding its AI partnerships. Other AI-linked firms, including Broadcom, also advanced. Microsoft gained nearly 2% ahead of earnings, crossing the $4 trillion valuation mark alongside Apple.
More members of the “Magnificent Seven” — including Alphabet, Amazon, and Meta Platforms — are set to report this week. So far, 83% of S&P 500 firms that have reported earnings have beaten expectations, according to FactSet.
Investors are widely expecting the Fed to deliver its second rate cut of 2025 on Wednesday, with hopes of another reduction in December. Meanwhile, optimism over U.S.-China trade talks added momentum, as leaders from both nations prepare to meet later this week.