U.S. Stocks Surge on AI Optimism Amid Holiday Cheer

U.S. stocks began the holiday-shortened week positively as AI-related tech stocks gained momentum. Micron's forecasts and an inflation report boosted market optimism, pushing major indices close to record highs. Despite light trading, key economic data is awaited. Other major market movers include Tesla, Warner Bros Discovery, and Clearwater Analytics.

U.S. stocks commenced the holiday-shortened week on an upbeat note as technology shares continued their advance, fueled by renewed interest in AI-related firms. Investors are keenly awaiting critical economic data later in the week. Micron Technology's strong forecasts and a favorable inflation report have bolstered the market, bringing the S&P 500 and Dow Jones Industrial Average nearly 1% shy of their December 11 record highs.

Nvidia gained 1.4% after announcing plans to ship advanced AI chips to China. Micron rose 1.8%, leading a spate of gains among semiconductor manufacturers. Despite market volatility, tech stocks have driven yearly market growth significantly, said Chris Larkin of E*TRADE. December remains a traditionally strong month for stocks, with the S&P 500 historically gaining around 1.3% during the so-called Santa Claus rally period.

Amid the positive sentiment around AI and a resilient U.S. economy, major indexes are on track for a third consecutive year of growth. Meanwhile, trading volumes are expected to be light due to the upcoming Christmas holiday. Key economic indicators, including GDP and consumer confidence data, are anticipated to provide further insight into the health of the current economic landscape.

(With inputs from agencies.)