S&P 500 and Nasdaq reach new highs as AI trade continues

The S&P 500 and Nasdaq Composite climbed to record closing highs on Tuesday as renewed enthusiasm around artificial intelligence pushed US equities higher despite months of pressure from rising interest rates, elevated bond yields and oil prices near $100 a barrel.

The S&P 500 gained 0.58% to close at 7,818.95, while the Nasdaq Composite rose 0.45% to 27,599.79. The Dow Jones Industrial Average added 0.49% to 51,521.04, remaining just over 5% below its August record.

The latest advance extends a rally that has continued through a challenging macroeconomic backdrop. 

The Federal Reserve raised interest rates by 25 basis points in September, its first increase since 2023, while the war in Iran pushed crude prices above $100 a barrel and helped send long term Treasury yields to their highest levels in more than two decades.

Still, the S&P 500 has risen about 14.2% since the beginning of the year, while the Nasdaq has gained roughly 18.7%. The gains have been led in large part by technology companies positioned to benefit from the continued expansion of AI infrastructure.

Nvidia, the largest company in the world by market capitalization, has been among the biggest contributors to the rally. The chipmaker approached a $6 trillion valuation on Tuesday after reaching a new all time high, while other companies tied to AI infrastructure continued to gain.

Marvell Technology rose 5.8% after raising its 2028 revenue forecast on strong demand for data center chips. AMD gained 2.8% after CEO Lisa Su said the company plans to substantially increase chip supply in 2027 to meet AI demand. Constellation Energy jumped 12.3% after reaching a 3,590 megawatt power agreement with Google.

Investors are now looking toward third quarter earnings for further confirmation that the spending boom is translating into corporate growth. Analysts expect S&P 500 earnings to increase 30.6% from a year earlier during the quarter, according to LSEG, with technology earnings expected to rise 66.5%.

Goldman Sachs estimates that more than half of expected S&P 500 earnings growth is coming from companies benefiting from AI infrastructure investment.

The rally has also increasingly become accessible through crypto markets as tokenized stock platforms bring some of the largest US equities and ETFs onchain.

Investors can gain tokenized exposure to the S&P 500 through products tied to the SPDR S&P 500 ETF Trust, better known as SPY. xStocks offers the ETF as SPYx, while Ondo Finance offers SPYon. Both products provide onchain exposure to the underlying ETF rather than directly tokenizing the S&P 500 index itself.

The same model has expanded to technology heavy Nasdaq exposure. xStocks offers QQQx and Ondo offers QQQon, both tied to the Invesco QQQ Trust, which tracks the Nasdaq 100. 

The Nasdaq 100 is separate from the broader Nasdaq Composite that reached a record Tuesday, but it includes many of the large technology and AI companies driving the current market rally.