US stocks closed higher on Tuesday, led by strong gains in technology shares, with the S&P 500 finishing at a fresh all-time high. Better-than-expected US economic data reinforced confidence in growth, even as traders continued to price in rate cuts later next year.
According to the US Commerce Department, third-quarter GDP grew at an annualized pace of 4.3%, well above market expectations of 3.2%. The strong reading highlighted resilient consumer spending and reinforced the narrative of a soft landing for the US economy.
Despite the upbeat data, traders remain cautious about the near-term policy outlook. Markets still expect the Federal Reserve to deliver two rate cuts in 2026, though the probability of a cut at the January 28 FOMC meeting remains low.
Trading activity is set to thin out as holiday schedules take effect. The New York Stock Exchange will close early at 1:00 p.m. ET on Wednesday, remain closed on Thursday for Christmas, and resume normal trading on Friday.
CIBC Capital Markets’ Head of Equity Strategy Chris Harvey compared the current enthusiasm around AI stocks to the dot-com era but emphasized that today’s market is fundamentally stronger. He noted that valuations remain reasonable and corporate fundamentals are far healthier than in the late 1990s.
US Stocks
Large-cap technology stocks were mostly higher, with AI-related names leading gains.
- NVIDIA rose 3.01%, closing at its highest level since November 17 and pushing its market capitalization back above $4.6 trillion
- Apple gained 0.56%
- Google (Class C) rose 1.39%
- Microsoft added 0.44%
- Amazon climbed 1.62%
- Meta gained 0.52%
- Broadcom advanced 2.30%
- Tesla slipped 0.65%
Chinese ADRs were mostly lower, with the Nasdaq Golden Dragon China Index down 0.58%. GDS Holdings and Pony.ai fell over 3%, while NIO, Li Auto, and XPeng also posted declines. Alibaba, PDD, and New Oriental ended modestly higher.
Market Snapshot:
- Dow Jones +79.73 points (+0.16%) to 48,442.41
- Nasdaq +133.02 points (+0.57%) to 23,561.84
- S&P 500 +31.30 points (+0.46%) to 6,909.79
Hong Kong
Hong Kong stocks traded in a narrow range ahead of the Christmas holiday, with markets closing early in the afternoon. The Hang Seng Index briefly rose as much as 0.45% intraday before ending slightly higher.
Heavyweight tech stocks showed limited movement, with Alibaba, Meituan, Xiaomi, JD.com, and Baidu fluctuating within a 1% range. Semiconductor stocks outperformed after reports of selective price increases on certain production capacities, with SMIC gaining over 5% at one point.
Nuclear power stocks advanced after Goldman Sachs reiterated its bullish outlook on uranium prices, suggesting further upside potential. In contrast, airline stocks declined following reports of flight cancellations on China–Japan routes starting in January.
Market Snapshot:
- Hang Seng Index +0.13% to 25,808.79
- Hang Seng Tech Index +0.14% to 5,496.52
- China Enterprises Index -0.03% to 8,911.85
A50
Mainland Chinese equities moved sideways in early trading, with major indices posting modest gains amid lighter holiday volumes. Overall market turnover declined notably compared with the previous session.
Power equipment and commercial aerospace stocks led gains, while precious metals and Hainan-related sectors faced pressure.
Market Snapshot:
- Shanghai Composite +0.24% to 3,929.25
- Shenzhen Component +0.31% to 13,410.05
- ChiNext Index +0.08% to 3,207.59
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