Stocks Soar Amid Economic Data and Hopes for 'Santa Claus Rally'

U.S. stocks rose as the S&P 500 notched a record after strong economic data. The third quarter GDP exceeded expectations, boosting bond yields and growth stocks. AI stocks rebounded, while consumer confidence and factory output data showed economic weaknesses. Hopes rise for a 'Santa Claus rally'.

U.S. stocks surged on Tuesday, with the S&P 500 achieving a record close. This followed a wave of economic data, notably a report showing a significant uptick in gross domestic product growth, which spurred higher bond yields and boosted growth stocks.

The Commerce Department announced that the GDP grew at a 4.3% annualized rate in the third quarter, surpassing economists' estimates. This robust growth, driven by strong consumer spending, has led markets to anticipate less likelihood of a U.S. Federal Reserve rate cut in January.

Billowing optimism over a potential 'Santa Claus rally' added to market gains. This seasonal effect is said to push the S&P 500 higher during the last five trading days of December and the first two of January.

(With inputs from agencies.)