US stocks hit fresh record highs on Tuesday as investors doubled down on the artificial intelligence trade just one day before the Federal Reserve is set to announce its latest interest rate decision. The S&P 500 added 0.23% to close at 6,890.89, after topping the 6,900 mark for the first time intraday. The Nasdaq Composite advanced 0.80% to 23,827.49, and the Dow Jones gained 161 points, or 0.34%, to finish at 47,706. All three major benchmarks also set new intraday highs.
Nvidia leads the AI rally
Chipmaker Nvidia surged 5% to a record, announcing a $1bn stake in Finnish telecom giant Nokia at its GTC conference. Nokia said proceeds will help fund its AI ambitions. Other semiconductor names, including Broadcom, also rose. Nvidia’s jump lifted its market valuation to nearly US$4.9 trillion, while Microsoft and Apple both briefly crossed the US$4 trillion mark during the session.
Earnings in focus
The earnings season has provided momentum, with one-third of S&P 500 companies already reporting. FactSet data show 83% have beaten profit forecasts. Microsoft will deliver results after the bell Wednesday, alongside fellow “Magnificent Seven” heavyweights Alphabet and Meta. Together with Apple and Amazon, these five stocks represent about a quarter of the S&P 500’s total weight. Analysts say further market gains now depend on continued earnings strength.
Federal Reserve decision looms
The Fed is expected to cut rates for a second time this year when it concludes its meeting on Wednesday. Investors will also be watching for guidance from Chair Jerome Powell on whether another cut is likely in December.
Trade hopes ahead of Trump-Xi talks
Markets were also buoyed by easing US-China tensions ahead of a meeting between President Donald Trump and Chinese President Xi Jinping on Thursday. Trump said both sides expect to reach a deal addressing issues from rare earth minerals to TikTok. Reports suggest US tariffs on Chinese goods could be lowered if Beijing curbs exports of fentanyl-related chemicals.
Local outlook
Looking at the local market, SPI futures point to a 0.1% gain. Quarterly results are due from Woolworths and Boss Energy. Annual meetings are scheduled for Ansell, Data#3, Dexus, EBOS Group, Endeavour Group, Nick Scali and Siteminder. Medibank Private will host an investor day, while September-quarter CPI figures are due at 11:30am.
