This article first appeared on GuruFocus.
U.S. stocks rose Tuesday as investors regained footing after a slow start to December, buoyed by gains in bitcoin and technology shares.
The Dow Jones Industrial Average climbed 188 points, or 0.4%, while the S&P 500 advanced about 0.5%. The Nasdaq Composite rose 0.8%, led by strength in AI-related technology names.
Bitcoin surged roughly 6%, recovering losses from the prior day, providing a boost to market sentiment. Shares of Nvidia (NASDAQ:NVDA) increased nearly 2% as investors focused on AI-driven growth opportunities.
Smaller AI and semiconductor companies also saw sharp gains. Credo Technology jumped 17% to an all-time high following better-than-expected earnings, while Astera Labs rose about 6%.
Analysts said optimism is also fueled by expectations that the Federal Reserve may cut interest rates at its Dec. 10 policy meeting. Markets are pricing in more than an 87% chance of a reduction, up from mid-November levels.
December tends to show seasonal strength, and technical indicators have improved, said Mark Hackett, chief market strategist at Nationwide. Yet concerns over AI spending and high valuations remain.