The Nasdaq Composite broke through the 20,000-point barrier, reaching 20,034 for the first time on Wednesday. The tech-centric index leaped 1.77%, propelled by widespread advances in tech stocks and growing optimism about Federal Reserve rate cuts in 2024.

What Happened: The S&P 500 rose by 0.82% to hit 6,084. In contrast, the Dow Jones Industrial Average bucked the trend, falling by 99.27 points to 44,148, according to data from Benzinga Pro.

Leading the rally were shares of Alphabet Inc. ( GOOG ) , which jumped 2.7%, building on Tuesday’s 5.3% advance. Tesla Inc. ( TSLA ) climbed 1.2% to $412, reaching its highest level since November 2021, boosted by Goldman Sachs raising its price target to $345.

The Magnificent Seven combined market capitalization surged to an unprecedented $18.2 trillion.

See Also: Adobe Q4 Earnings: Revenue, EPS Beat On Strong Demand Related To AI, Shares Slide Following Soft Guidance

Why It Matters: The milestone comes as November’s Consumer Price Index showed inflation rose 2.7% year-over-year, slightly above October’s 2.6% but matching economist forecasts.

Core inflation held steady at 3.3%, meeting expectations. Following the data, traders increased bets on interest rate cuts, with CME FedWatch showing a 96% probability of a quarter-point reduction at the Fed’s Dec. 18 meeting, up from 86% before the report.

Treasury yields declined, with the rate-sensitive 2-year yield dropping 4 basis points to 4.10% and the benchmark 10-year yield falling 2 basis points to 4.20%, reflecting market optimism about potential monetary easing.

Overseas markets showed mixed performance, with Japan’s Nikkei 225 and China’s Shanghai Composite posting modest gains, while Hong Kong’s Hang Seng declined 0.8%. European markets moved higher, with France’s CAC 40 leading gains at 0.4%.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.