Tech Stocks Soar as AI Optimism Sparks Market Rally

U.S. stocks began the week positively, driven by rising tech stocks due to AI enthusiasm and anticipated economic data. Micron, Nvidia, and Tesla notably rose. Santa Claus rally tradition and easing monetary policy support optimism, with major indexes poised for a third consecutive year of gains.

The U.S. stock market started the holiday-shortened week strong, buoyed by renewed interest in technology stocks, particularly due to excitement over artificial intelligence advancements. Investors are also keenly awaiting key economic indicators set to be released later in the week.

A surge in tech stocks, sparked by Micron Technology's impressive forecasts and favorable inflation data, propelled the S&P 500 and Dow Jones Industrial Average to within 1% of their record peaks. Notably, Micron, Nvidia, and Tesla experienced significant gains, with Tesla achieving an all-time high after Elon Musk's compensation plans were reinstated.

The broader market trend, supported by robust earnings reports and traditional optimism during the so-called Santa Claus rally period, has set major indexes like the S&P 500 on track for their third consecutive year of growth. Meanwhile, eyes remain on upcoming economic reports and the impact they may have on the market's momentum.

(With inputs from agencies.)