AI Boom and Commodity Rally Drive Market Higher—Here's What You Need to Know

Equities extended their gains today with the S&P 500 rising +0.26%, the Dow Jones Industrials up +0.27%, and the Nasdaq 100 advancing +0.49%. Futures also reflected bullish momentum, as March E-mini S&P 500 futures climbed +0.23% and March E-mini Nasdaq futures surged +0.47%.

The day’s rally was anchored by two major catalysts: semiconductor strength fueled by continued AI investment and robust gains in mining stocks. Chipmakers including Sandisk, Western Digital, and Seagate led the charge, with Sandisk jumping over +22% and Western Digital gaining more than +12%. Microchip Technology climbed over +9% after raising its Q3 net sales forecast to $1.19 billion, exceeding analyst expectations.

AI Investment and Chip Sector Propel Broader Market

The semiconductor rally reflects persistent confidence in artificial intelligence infrastructure buildout. Texas Instruments, Micron Technology, NXP Semiconductors, Analog Devices, and Lam Research all posted solid gains, signaling broad-based momentum across the chip ecosystem.

However, not all technology-related stocks participated in the upside. Data-center cooling companies faced headwinds after Nvidia CEO Jensen Huang announced that the company’s new Rubin chips can operate with water cooling at ambient temperatures, eliminating the need for expensive chillers. This sparked an immediate selloff in thermal management stocks—Modine Manufacturing plummeted over -14%, while Johnson Controls International, Trane Technologies, Carrier Global, and Vertiv Holdings all declined more than -7%.

Mining Stocks Surge on Copper’s Historic Rally

Mining equities showed impressive strength as copper prices hit a fresh all-time high, buoyed by expectations that the Trump administration may impose tariffs on refined copper. U.S. copper imports in December reached their highest level since July, suggesting inventory buildup ahead of potential trade restrictions.

Hecla Mining led sector gainers with a more than +8% advance, while Newmont Mining, Coeur Mining, Freeport McMoRan, and Barrick Mining all posted double-digit percentage gains. Silver also participated in the commodity strength, rising more than +3%.

Mixed Signals From Economic Data and Fed Commentary

The economic calendar presented a conflicting picture. December’s S&P services PMI was revised downward to 52.5 from 52.9, signaling modest growth in the service sector. Meanwhile, the 10-year Treasury yield edged higher by +2 basis points to 4.18%, reflecting rising inflation expectations as the 10-year breakeven inflation rate reached a one-month peak of 2.284%.

Federal Reserve officials offered divergent perspectives. Richmond Fed President Tom Barkin offered hawkish remarks, suggesting that tax cuts and deregulation could accelerate growth, while monetary policy remains in a “delicate balance” between rising joblessness and persistent inflation. In contrast, Fed Governor Stephen Miran struck a dovish tone, stating that current policy is “clearly restrictive” and that rate cuts exceeding 100 basis points are justified this year.

Global Equities Provide Support

International strength lent credibility to the U.S. rally. The Euro Stoxx 50 climbed to a record high, up +0.22%, while Japan’s Nikkei 225 also reached new highs with a +1.32% advance. China’s Shanghai Composite surged +1.50% to a 10.5-year peak, providing further support to risk sentiment.

Notable Stock Moves Beyond the Big Trends

Several individual names attracted attention for company-specific developments. OneStream soared over +22% after buyout firm Hg revealed advanced acquisition discussions. Aeva Technologies jumped over +21% following news that its 4D LiDAR technology was selected for Nvidia’s Drive Hyperion autonomous vehicle platform. Zeta Global Holdings gained over +10% on a strategic AI partnership announcement with OpenAI.

On the downside, American International Group dropped over -7% following CEO retirement news, while credit rating agencies Equifax and TransUnion fell more than -5% after FHFA Director Pulte questioned their pricing strategies.

What’s Ahead This Week

Investors will focus on a slate of economic data releases: Wednesday brings December ADP employment figures (expected +48,000), December ISM services index (forecast -0.3 to 52.3), and November JOLTS job openings (projected +9,000 to 7.679 million). Thursday will feature Q3 nonfarm productivity data (anticipated +4.7%) and weekly jobless claims (expected +12,000 to 211,000). Friday wraps up the week with December nonfarm payrolls (forecast +59,000) and the unemployment rate (expected -0.1 to 4.5%).

Markets are currently pricing just a 16% probability of a -25 basis point rate cut at the January 27-28 FOMC meeting, reflecting uncertainty about the Fed’s next move amid mixed economic signals.