U.S. Stocks Surge Amid Economic Growth Data and Santa Claus Rally Hopes

U.S. stocks experienced gains with the S&P 500 reaching a closing record due to strong economic growth data. This upswing dampened hopes for a Federal Reserve rate cut, while AI stocks rebounded. The anticipated "Santa Claus rally" added to optimism, even as consumer confidence showed weakness.

U.S. stocks rose sharply on Tuesday, with the S&P 500 setting a new closing record, following an influx of economic data that has sent bond yields surging and buoyed growth stocks.

The latest report from the Commerce Department showed a 4.3% increase in the gross domestic product for the third quarter, the fastest growth rate in 2023, surpassing the expected 3.3% estimate. This was driven by strong consumer spending, although the pace is predicted to slow in the fourth quarter.

Despite mixed signals from other economic data, market sentiment remains optimistic as investors hope for a "Santa Claus rally" and monitor trading activity, which is expected to dwindle as the holiday season approaches.