• The Dow Jones climbed around 80 points on a wobbly Tuesday as investors tilt bullish.
• Equity markets remain hopeful heading into the year's end.
• Looming holiday closures keep overall market momentum capped.
• US GDP accelerated in the third quarter, but consumers remain skeptical.

US stocks extended their recent rally on Tuesday, with major indexes posting a fourth consecutive day of gains as investors continued to favor artificial intelligence–related names during a holiday-shortened trading week. The advance kept the S&P 500 (SP500) within striking distance of fresh record highs, reinforcing the market’s resilient tone even in the face of stronger-than-expected economic data.

Equities recover footing as rate cut hopes persist

The S&P 500 rose about 0.3%, hovering just below the 6,900 level and near both its intraday and closing records. The Nasdaq Composite outperformed with a gain of roughly 0.4%, supported by ongoing strength in large-cap technology and AI-linked stocks. The Dow Jones Industrial Average (DJIA) also edged higher, adding about 80 points. Not all corners of the market participated, however, as small-cap stocks lagged. The Russell 2000 declined around 0.6%, reflecting investor caution toward more economically sensitive companies amid signs of robust growth.

Markets digested a delayed but closely watched economic report showing US Gross Domestic Product (GDP) growth expanded at a 4.3% annualized pace in the third quarter, significantly exceeding expectations. Growth was driven by resilient consumer spending, which accelerated from the prior quarter. The upside surprise briefly unsettled markets early in the session, as investors reassessed how quickly the Federal Reserve (Fed) might move to lower interest rates. Despite that initial hesitation, stocks recovered as traders maintained confidence that multiple rate cuts remain likely next year.

Futures markets continue to price in two Fed rate cuts by the end of next year, even as stronger growth complicates the near-term outlook. Some investors also remain focused on potential changes in Fed leadership, with expectations that a future chair could lean more dovish than current policymakers. For now, the market appears willing to look past near-term economic strength and focus on a longer-term easing cycle.

Consumers remain cautious despite upshot data

Sentiment data offered a more cautious signal. The Conference Board (CB) reported that consumer confidence fell again in December, underscoring lingering concerns about the economic outlook despite strong headline growth. Four of the five components of the index declined, leaving overall confidence well below levels seen earlier in the year and suggesting households remain uneasy about future conditions.

Elsewhere, institutional news drew attention as Citadel plans to return roughly $5 billion in profits to investors early next year. The hedge fund’s flagship Wellington strategy has posted solid gains so far this year, highlighting continued strength among large alternative asset managers.

In commodities markets, precious metals surged to fresh records. Gold futures reached a new all-time high above $4,530 an ounce, while silver climbed past $70 an ounce for the first time ever on a nominal basis. The moves reflected ongoing demand for hard assets amid expectations of future rate cuts and longer-term inflation concerns.

With US markets set to close early on Christmas Eve and remain shut on Christmas Day, investors are entering the holiday period with equities near record levels, supported by optimism around technology leadership, a resilient economy, and the prospect of easier monetary policy ahead.

Dow Jones daily chart