Dow, S&P 500 end at record highs on Santa rally

US STOCKS closed higher on Wednesday, as the Dow Industrials and S&P 500 registered record closing highs in a broad rally during a holiday-shortened session.

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Indexes have been climbing in recent days, buoyed in part by a rebound in artificial intelligence (AI)-related names after last week's selloff that was triggered by concerns about inflated valuations and high capital expenditures denting profits. Each of the major indexes recorded its fifth straight session of gains.

But recent data showed the economy remains resilient, and the market is still pricing in roughly 50 basis points of rate cuts from the US Federal Reserve next year, although expectations for a January cut are low, according to CME's FedWatch Tool.

Data on Wednesday showed new applications for US jobless benefits unexpectedly fell last week.