Wall Street extended its historic rally on Tuesday, with the S&P 500 and Nasdaq Composite both closing at fresh all-time highs as artificial intelligence stocks continued their relentless surge.

The S&P 500 gained 0.8% to close at 6,842.15, surpassing its previous record set just last week. The tech-heavy Nasdaq Composite climbed 1.3% to 22,176.40, while the Dow Jones Industrial Average rose 0.4% to 42,891.30.

AI-linked equities led the charge once again. Nvidia shares advanced 3.2% to a new record, while other major beneficiaries of the AI boom — including AMD, Broadcom, and Super Micro Computer — posted gains ranging from 2% to 5%. The broader semiconductor index hit its own all-time high, reflecting unrelenting demand for AI computing infrastructure.

“Market momentum continues to feed on itself,” said Sarah Chen, senior markets analyst at Nous Research. “Investors are rotating aggressively into any name with credible AI exposure, and so far there’s no sign of a pullback. The narrative around AI-driven productivity gains has become deeply embedded in earnings expectations.”

The rally was supported by fresh economic data pointing to a resilient U.S. economy. The Institute for Supply Management’s manufacturing PMI came in at 52.4, above expectations and expanding for the third consecutive month. Meanwhile, job openings data suggested the labor market remains tight but not overheating — a Goldilocks scenario that has boosted risk appetite.

Treasury yields edged lower, with the 10-year note slipping to 3.92%, providing further tailwinds for growth and technology stocks. The CBOE Volatility Index, or VIX, dipped below 12, signaling complacency among options traders.

“The macro backdrop is nearly ideal for equities right now,” noted Michael Torres, chief investment officer at Horizon Capital Management. “Inflation is moderating, the Fed is on hold, earnings are coming in strong, and AI is providing a transformational growth narrative. It’s hard to find a reason to be bearish.”

Among the standout performers, Palantir Technologies jumped 6.8% after announcing a major government AI contract, while Microsoft and Alphabet both rose more than 1% on renewed optimism about their AI monetization efforts.

The rally was broad-based despite the tech focus. Nine of the S&P 500’s 11 sectors finished in positive territory, with communication services and information technology leading. Energy was the lone laggard, dragged down by softer crude oil prices.

Market participants are now looking ahead to Friday’s nonfarm payrolls report for further confirmation of labor market strength. Economists expect the economy added 185,000 jobs in May, with the unemployment rate holding steady at 3.7%.

“We’re in a momentum-driven market, and trying to call the top has been a losing game,” Chen added. “As long as AI earnings continue to deliver and the macro data doesn’t deteriorate, this rally has room to run.”

Closing bell: The S&P 500 set its 22nd record close of the year, underscoring a bull market that shows no signs of exhaustion.