US equities rose on Tuesday as a rebound in Bitcoin and strength across major technology names helped Wall Street regain its footing after a soft start to December trading.
The Dow Jones Industrial Average added 137 points, or 0.3%, while the S&P 500 also rose 0.3% and the Nasdaq Composite advanced 0.4%.
Bitcoin climbed 3.8%, recouping part of Monday’s sharp drop — its worst session since March.
The recovery supported broader risk sentiment and lifted crypto-linked equities after a turbulent prior day that saw Coinbase and Robinhood decline.
Tech and AI names lead the rebound
Technology stocks tied to the artificial intelligence trade also helped drive Tuesday’s gains.
Nvidia rose nearly 2%, reversing part of Monday’s pullback, while Oracle moved higher after sliding in the previous session.
The moves softened the risk-off tone that has weighed on markets in recent weeks amid concerns about inflation, stretched valuations and the uncertain return on investment from large AI spending cycles.
The retreat earlier this week ended a five-day winning streak for the major indexes.
Investors have been recalibrating expectations around tech leadership following a difficult November in which the Nasdaq fell 1.5% and experienced intramonth declines of nearly 8% from its October close.
Even so, both the S&P 500 and Dow eked out modest gains for the month.
The market’s recent turbulence reflects shifting views on the AI sector’s long-term dynamics.
“What began in early November as a concern over the likely return on investment over artificial intelligence has now morphed into picking winners and losers,” said David Morrison, analyst at Trade Nation.
He noted that last week’s revelation about Alphabet exploring the use of its internal TPUs to supply Meta’s data centres raised competitive pressure on Nvidia, threatening its near-monopoly in AI compute hardware.
Traders look ahead to Fed decision and year-end seasonality
Traders remain focused on the Federal Reserve’s upcoming policy meeting.
Markets are pricing in more than an 87% chance of a rate cut on Dec. 10, a sharp increase from mid-November, according to the CME FedWatch tool.
Dovish comments from Fed officials in recent weeks have helped steady sentiment in the face of sector-specific volatility.
Historically, December has been a supportive month for equities. The S&P 500 has averaged a gain of more than 1% since 1950, making it the benchmark’s third-strongest month, according to the Stock Trader’s Almanac.
With investors searching for catalysts after a choppy November, the combination of a bitcoin rebound, recovering tech flows and rising expectations for monetary easing contributed to Tuesday’s modest but broad-based advance.
As December trading unfolds, market participants are watching whether the recovering momentum in tech and crypto can feed into a broader year-end rally — or whether ongoing concerns about valuations and AI spending will continue to cast a shadow over risk assets.
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