U.S. Stocks Soar Amid Holiday Rally and AI Optimism

U.S. stocks climbed to record highs in a holiday-shortened session as AI-related rebounds and resilient economic data fueled optimism. The Dow and S&P 500 achieved five consecutive days of gains amidst hopes for a 'Santa Claus rally.' Rate cut expectations remain modest, with the Fed's see-sawing influencing market dynamics.

The U.S. stock market saw remarkable gains on Wednesday, with both the Dow Industrials and S&P 500 achieving record-high closes during a rally shortened by the holiday. This surge is largely attributed to AI-related rebounds, reversing last week's selloff concerns over inflated valuations.

Moreover, economic resilience was highlighted by unexpected declines in jobless benefits claims, supporting hopes for a 'Santa Claus rally'—an end-of-year stock market boost often seen in the last week of December and the first week of January.

Despite light trading volume, optimism was evident. Micron Technology's shares hit a record high after a strong forecast, boosting tech stocks, while financials performed robustly except for energy stocks. Attention also turned to future Fed leadership after recent remarks from President Trump added speculation to the mix.

(With inputs from agencies.)