Tech Surge Powers Stock Market to Historic Peaks; Trillion-Dollar Rally Continues

Markets delivered a mixed yet broadly positive session on Tuesday, with the S&P 500 climbing +0.62%, the Dow Jones Industrials advancing +0.99%, and the Nasdaq 100 gaining +0.94%. March E-mini S&P futures (+0.62%) and E-mini Nasdaq futures (+0.95%) mirrored the gains. This marked another milestone as both the S&P 500 and Dow reached record closes, while the Nasdaq 100 posted its strongest showing in a week.

Semiconductor Strength Drives the Broader Rally

The session’s primary engine was technology and semiconductor leadership. SanDisk ($SNDK) emerged as the day’s biggest winner, surging over +27%, with Western Digital ($WDC) following closely at +16% gains. Other chipmakers also participated meaningfully: Seagate Technology Holdings ($STX) +14%, Microchip Technology ($MCHP) +11% after raising Q3 sales guidance to $1.19 billion (above consensus), Micron Technology ($MU) +9%, and NXP Semiconductors ($NXPI) +9%. Texas Instruments ($TXN) added +8%, while Lam Research ($LRCX) and Applied Materials ($AMAT) climbed over +4%.

This broad-based advance in semiconductor equities reflected optimism about chip demand cycles and manufacturing momentum.

Copper Hits Record High; Mining Stocks Rally

Commodity markets provided additional momentum. Copper prices reached an all-time high on Tuesday, fueling a strong session for mining equities. The move came amid market expectations that potential tariff policies on refined copper could redirect inventory flows into the US market, potentially tightening global supplies. December US copper imports hit their highest level since July, signaling robust demand.

Mining stocks responded accordingly: Hecla Mining ($HL) rose +11%, Newmont Mining ($NEM) +5%, Coeur Mining ($CDE) and Barrick Mining ($B) both +4%, and Freeport McMoRan ($FCX) +2%. Silver prices jumped over +5% to accompany copper’s strength.

Interest Rate Pressures Emerge Amid Inflation Signals

While equities advanced, fixed income faced headwinds. The 10-year Treasury yield climbed +2 basis points to 4.18%, driven by rising inflation expectations. The 10-year breakeven inflation rate reached a one-month high of 2.284%, signaling market pricing for higher price pressures ahead. March 10-year T-note futures declined 3 ticks.

This dynamic reflects conflicting signals from the Fed. Richmond Federal Reserve President Tom Barkin offered hawkish commentary, suggesting that tax cuts and deregulation could lift growth while monetary policy remains in “delicate balance” given unemployment and persistent inflation. Conversely, Fed Governor Stephen Miran struck a dovish tone, stating Fed policy is “clearly restrictive” and that “well over 100 basis points of rate cuts are going to be justified this year.”

Market pricing suggests only an 18% probability of a -25 basis point rate cut at January’s FOMC meeting.

Economic Data Sends Mixed Signals

Tuesday’s economic releases offered a cautious outlook. The December services PMI was revised downward by 0.4 points to 52.5, missing the previously reported 52.9. This weakness in the service sector contrasts with strength in manufacturing components.

Looking ahead, the week holds significant data releases: Wednesday brings December ADP employment (+48,000 expected), December ISM services index (-0.3 expected to 52.3), and October factory orders (-1.1% m/m expected). Thursday features Q3 productivity data (+4.7% expected) and weekly unemployment claims. Friday will see December nonfarm payrolls (+59,000 expected), December unemployment rate (expected -0.1 to 4.5%), and University of Michigan consumer sentiment index.

Global Markets Paint Bullish Picture

International equity markets supported the US advance. The Euro Stoxx 50 reached a new record high, closing +0.14%. China’s Shanghai Composite rallied to a 10.5-year peak, gaining +1.50%. Japan’s Nikkei Stock 225 climbed to new record levels, advancing +1.32%. This synchronized global strength provided constructive backdrop for US equities.

European government bonds rallied on softer inflation data: Germany’s December CPI rose only +0.2% m/m and +2.0% y/y, weaker than expected. This pushed 10-year German bund yields down 2.8 basis points to 2.842%.

Selected Individual Stock Highlights

Beyond the semiconductor rally, several names posted notable moves:

Gainers: Aeva Technologies ($AEVA) jumped +34% after its 4D LiDAR technology was selected for Nvidia’s Drive Hyperion platform. OneStream ($OS) surged +28% on acquisition chatter from Hg. Zeta Global Holdings ($ZETA) gained +10% following a strategic OpenAI partnership announcement. Oculis Holdings ($OCS) rose +6% after FDA breakthrough designation for optic neuritis therapy. Axon Enterprise ($AXON) climbed +6% on Northcoast Research upgrade. Vistra Corp. ($VST) added +4% after agreeing to $4 billion power plant acquisition.

Losers: Energy stocks retreated as WTI crude oil fell over -2%. Chevron ($CVX) led decliners in the Dow, dropping -4%. Exxon Mobil ($XOM) and Halliburton ($HAL) each fell -3%. Data-center cooling names faced pressure after Nvidia’s water-cooling announcement: Modine Manufacturing ($MOD) declined -7%, Johnson Controls ($JCI) -6%, and Trane Technologies ($TT) -2%.

Credit-related stocks stumbled following FHFA director commentary questioning pricing practices: American International Group ($AIG) led S&P 500 losers at -7%, while TransUnion ($TRU) and Equifax ($EFX) fell -4% and -3% respectively. Versant Media Group ($VSNT) led Nasdaq 100 decliners at -10% on analyst downgrade.

The Broader Takeaway

Tuesday’s session underscored the tech sector’s continued dominance in market leadership. With billion-dollar surges in semiconductor and data storage equities driving indices to fresh records, investors demonstrated continued appetite for growth and technology exposure despite mixed economic signals and Fed policy uncertainty. The week ahead will test whether current momentum can sustain amid incoming employment and consumer sentiment data.