Stocks Rise as Tech and Crypto Lead, Traders Eye Potential Shake-Up at the Fed

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U.S. stocks finished higher Tuesday, lifted by strength in technology and a fresh surge in cryptocurrencies as investors calibrated the possibility of a major shift in Federal Reserve leadership. At the closing bell, the Dow Jones Industrial Average rose 185 points, or 0.39%, to 47,744.5, while the S&P 500 gained 0.25% and the Nasdaq Composite advanced 0.59%. Small-caps lagged, with the Russell 2000 slipping 0.20%.

Crypto markets stole the spotlight. Bitcoin vaulted 6.49% to $91,012.16, extending its recent recovery and bolstering sentiment across risk assets. The move coincided with renewed wagers on easier monetary policy next year, a theme dominating markets as speculation builds that President Trump is preparing to nominate economist Kevin Hassett as the next Fed Chair.

Hassett is “widely seen as President Trump's preferred choice," a prospect that traders believe would signal a more dovish trajectory for interest rates. Long-term yields have already moved lower in response to his rising odds, reflecting expectations for looser financial conditions. A Hassett-led Fed could emphasize reduced regional bank influence and a sharper focus on price stability, while markets will scrutinize whether he preserves the central bank’s institutional independence. Credibility concerns hinge on whether investors view him as a “political extension of the White House” or as a disciplined technocrat.

Rate expectations helped bolster growth and AI-exposed names, a trend reinforced by standout corporate news in the infrastructure layer of the AI boom. Credo Technology posted “the strongest quarterly results in Credo’s history,” with 272% year-over-year revenue growth, a jump to $268 million, and guidance implying another quarter of rapid acceleration. Management told investors that its products, ranging from Active Electrical Cables to advanced connectivity platforms, are benefiting directly from hyperscalers racing to expand AI training and inference clusters. The upside surprise helped stabilize the broader AI complex.Commodities were mixed. Crude oil fell 1.16% to $58.63 as traders weighed tepid demand signals, while gold slipped 0.76% to $4,242.30. The CBOE Volatility Index dropped 4.64% to 16.44, reflecting investors’ renewed risk appetite.

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In the regulatory arena, cannabis-linked financial firms were in focus after Terry Mendez, CEO of Safe Harbor Financial, told AInvest that federal rescheduling of marijuana would expand, not undercut, the company’s compliance platform. Asked whether reform would diminish the industry’s need for Safe Harbor, Mendez responded: “Absolutely not.” He emphasized that with only 8% of U.S. banks currently serving cannabis businesses, federal changes would draw more institutions into the sector, saying, “Think of us as [how] companies outsource payroll to ADP, banks outsource compliance to Safe Harbor.” Mendez added that reform “actually would be a tremendous boon for Safe Harbor,” as improved tax treatment would lift cannabis-industry profitability and deposits.

As markets look toward the December Fed meeting, traders continue to balance near-term rate-cut expectations with the possibility of a consequential leadership transition at the central bank. For now, risk assets are responding positively to the prospect of lower borrowing costs—and to earnings signals that the AI-infrastructure cycle remains firmly intact.