Wall Street closed higher on Tuesday, with chip stocks rising sharply on renewed optimism about AI, a rally in Moderna and the Dow Jones Industrial Average hitting an all-time high.
Moderna rose nearly 11% after BofA Global Research raised its price target for the drugmaker, helping boost the S&P 500 Healthcare Index, which rose 1.96%. Memory and storage technology stocks also rose after Nvidia CEO Jensen Huang spoke at the Consumer Electronics Show in Las Vegas and offered details including a new layer of storage technology. SanDisk rose more than 27%, Western Digital rose 17%, Seagate Technology gained 14% and Micron Technology rose 10%, with all four stocks hitting all-time highs.
The PHLX chip index also hit an all-time high, rising 2.75% on the day, bringing its gain in the first three sessions of 2026 to around 8%.
“I think we’re going to have a very strong earnings season for Big Tech, and all of those capital spending estimates we’re hearing are going to be revised up again,” said Jed Ellerbroek, portfolio manager at Argent Capital in St. Louis.
Investors are awaiting reliable economic data as the effects of the 43-day federal shutdown begin to dissipate, with upcoming reports including the Survey of Job Openings and Labor Turnover on Wednesday and the December jobs report on Friday. Weaker-than-expected jobs data could strengthen the case for central bank interest rate cuts.
As fourth-quarter earnings season approaches in the coming weeks, valuations on Wall Street remain relatively high. The S&P 500 trades at about 22 times expected earnings, up from 23 in November, but above the index’s five-year average of 19, according to LSEG data.
The S&P 500 rose 0.62% to close the session at 6,944.82 points.
The Nasdaq gained 0.65% to 23,547.17 points, while the Dow Jones Industrial Average rose 0.99% to 49,462.08 points, approaching the historic mark of 50,000 points.
Trading volume on U.S. exchanges was relatively high, with 18.7 billion shares traded, compared to an average of 16.1 billion shares over the previous 20 sessions.
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Data on Tuesday showed that the final S&P Global composite PMI fell to 52.7 in December from 53.0 in the previous month, while the services PMI fell to 52.5 from 52.9.
Markets also analyzed comments from Tom Barkin, president of the Richmond Federal Reserve, who reiterated the US central bank’s cautious approach to additional cuts, in contrast to Governor Stephen Miran’s call for aggressive cuts in an interview with Fox Business.
Investors dismissed fears of a wider geopolitical impact after US forces captured Venezuelan President Nicolas Maduro over the weekend, betting the move could pave the way for US companies to access Venezuela’s oil reserves.
Oil stocks fell after the previous session’s strong gains, with giants Exxon Mobil and Chevron losing 3.4% and 4.5%, respectively. Comments from Nvidia’s Huang about the efficiency of the company’s new chips raised concerns about demand for data center cooling systems. Johnson Controls shares fell 6.2%, while Trane Technologies fell 2.5%.
Shares of AIG (AIG.N) fell 7.5% after the insurance giant announced that its CEO, Peter Zaffino, would step down.
Stocks advanced relative to decliners within the S&P 500 by a ratio of 3.1 to 1.
The S&P 500 recorded 62 new highs and 8 new lows; The Nasdaq recorded 126 new highs and 42 new lows.
With information from Reuters
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