Markets Await Fed Speech on Rate Clues as the S&P 500 Drifts Higher

U.S. stocks edged higher on Tuesday, reaching new record highs after notching their longest winning streak since May. Despite the ongoing government shutdown now entering its seventh day, investors appeared focused on the continued wave of artificial intelligence announcements that kept tech shares in the spotlight.

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The S&P 500 climbed 0.2% as of 9:37 a.m. in New York, setting the stage for an eighth straight day of gains, while the Nasdaq 100 added 0.3%. Dell Technologies surged 5.1% after nearly doubling its outlook for both revenue and profit over the next two years. The company said growing demand for AI-related products should sustain that momentum at least through fiscal 2030.

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Chipmaker Advanced Micro Devices (AMD) jumped 6.5%, building on Monday’s advance after Jefferies upgraded the stock to “buy” in response to AMD’s new partnership with OpenAI. IBM shares rose 2.9% as the tech giant announced plans to integrate Anthropic’s Claude large language models into its software suite, underscoring its expanding AI ambitions.

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Meanwhile, Aehr Test Systems saw its shares tumble 24% after reporting fiscal first-quarter revenue that dropped from a year earlier.

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Stocks have continued to push higher ahead of third-quarter earnings season, set to kick off next week. The ongoing enthusiasm around AI remains a central driver of Wall Street’s momentum, although some analysts caution that valuations may be running hot.

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“Stable inflation, falling interest rates, and stronger earnings are all helping support higher valuations and lift stock prices,” said Eric Freedman, chief investment officer at U.S. Bank Asset Management. “However, stretched valuations and uncertainty surrounding tariffs still pose risks. Investors will be paying close attention to early holiday spending and 2026 corporate outlooks for insight into how sentiment may evolve heading into year-end.”

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The prolonged government shutdown and the resulting pause in key economic data releases come at a sensitive time for markets, with concerns about labor market resilience and inflation still prominent.

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As a result, traders are watching closely for clues from the Federal Reserve’s meeting minutes, due Wednesday afternoon, along with comments from policymakers including Fed Vice Chair Michelle Bowman, Governor Stephen Miran, and Minneapolis Fed President Neel Kashkari.

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On Monday, President Donald Trump indicated he was open to discussions with Democrats regarding healthcare subsidies as part of efforts to resolve the funding impasse. However, shortly after, he posted on social media, “I am happy to work with the Democrats on their Failed Healthcare Policies, or anything else, but first they must allow our Government to re-open.”

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In corporate news, James Hardie Industries jumped 9.3% after the building-materials firm reported preliminary second-quarter net sales that topped analyst expectations. Amkor Technology gained 5.4% after breaking ground on a new advanced semiconductor packaging and testing campus in Arizona, signaling continued investment in U.S. chip infrastructure.

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Constellation Brands also advanced 4% after the maker of Corona and Modelo Especial beers posted quarterly earnings per share that exceeded Wall Street forecasts. In a standout move, Trilogy Metals skyrocketed 249% its biggest single-day gain on record since Bloomberg began tracking the stock in 2012. The rally came after the U.S. government announced plans to acquire a 10% stake in the Canadian minerals explorer as part of a $35.6 million initiative aimed at securing key energy and mining assets in Alaska.

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Overall, investors are maintaining optimism as the market continues to climb, bolstered by easing inflation, lower interest rates, and steady earnings growth. However, many remain cautious about potential volatility tied to political uncertainty and elevated stock valuations.

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With the AI boom driving both corporate innovation and investor enthusiasm, Wall Street’s record-setting pace shows few signs of slowing. Yet, as companies prepare to release earnings and policymakers weigh in on economic direction, market participants are bracing for signals that could define the next phase of this historic rally.

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