Stocks Close at Record Highs as Tech Rally, Trade Thaw Hopes, and Fed Easing Bets Lift Wall Street

Wall Street finished at fresh records, with all three major indexes setting new closing highs: the Dow Jones Industrial Average rose +337.41 to 47,544.5 (+0.71%), the S&P 500 gained +83.42 to 6,875.11 (+1.23%), and the Nasdaq Composite advanced +432.59 to 23,637.5 (+1.86%). The Russell 2000 added 0.36% to 250.33. Commodities were mixed: front-month crude oil (Dec ’25) slipped 0.28% to $61.33, while gold (Dec ’25) fell 3.27% to $4,002.50.

Investors leaned into megacap tech and AI beneficiaries on the back of two powerful narratives: momentum toward a U.S.–China trade framework and an increasingly dovish Federal Reserve backdrop. A research note from Dan Ives, Managing Director at Wedbush Securities, struck an explicitly upbeat tone on cross-border talks. Ives in the US/China Trade Deal Talks Look Very Positive; Bullish Scenario for Tech Stocks writes, "The tea leaves appear to be very positive talks coming out of the weekend in Malaysia and would be a game changer for the AI Revolution thesis if the US/China get to a more comprehensive trade deal…”

Policy expectations provided a second tailwind as the Federal Reserve prepares to meet on Tuesday and Wednesday. Futures markets assign roughly a 98% chance the Fed trims rates 25 basis points, a move that would take the funds rate below 4% for the first time since 2022, while officials weigh ending quantitative tightening to ensure “ample reserves." With government data flow constrained, the Fed has emphasized labor-market fragility, and private indicators such as ADP point to softer hiring even as the Atlanta Fed’s GDPNow tracks solid third-quarter growth. Those cross-currents support the market’s soft-landing view while reinforcing hopes for additional liquidity relief.

Tech's continued stock leadership was stoked by expectations from Nvidia's GTC Washington conference. On Tuesday, Jensen Huang is set to frame AI as national infrastructure. Investors will parse any signals on hyperscaler capex just as a heavy “Magnificent 7” earnings slate arrives, heightening sensitivity to guidance on AI demand and data-center buildouts. Microsoft, Meta, Amazon, Apple, and Alphabet are the big names reporting earnings this week.

Why it matters: A combination of trade de-escalation, policy easing, and AI-investment optimism is the classic recipe for multiple expansion. If the Fed confirms a rate cut and signals QT’s end, liquidity conditions could improve further—though officials may try to avoid fueling excess exuberance. For equities already at highs, this week’s policy message and mega-cap results will determine whether the rally broadens or merely grinds higher on AI enthusiasm.