Investing.com – The S&P 500 closed higher on Tuesday, inching closer to a record high as the stock rally expanded beyond the tech sector, fueled by ongoing optimism about potential rate cuts.

By 16:00 ET (21:00 GMT), the S&P 500 traded 0.6% higher at 4,768.37, approaching its all-time closing high of 4,796.56 by approximately 0.6%. The Dow Jones Industrial Average also rose by 251 points, or 0.7%, achieving its fifth-straight record high. The NASDAQ Composite climbed 0.7%.

Energy and Materials Lead the Market Surge

Materials and energy sectors played a key role in driving the market higher. The energy sector received support from a surge in oil prices, despite the U.S. announcement of plans to expand a naval task force to protect shipping in the Red Sea.

Materials, including companies such as The Mosaic Company (NYSE:MOS), FMC Corporation (NYSE:FMC), and Freeport-McMoran Copper & Gold Inc (NYSE:FCX), experienced gains due to the increased demand for commodities like copper. Investors continue to bet on rate cuts, expecting them to boost economic growth and metals demand.

Tech Giants Make Headlines

In the tech industry, Alphabet’s (NASDAQ:GOOGL) Google agreed to a $700 million settlement to resolve a lawsuit brought by U.S. states and consumers over anticompetitive practices at its Play app store on Android devices. Alphabet’s stock rose by 1%.

Microsoft Corporation (NASDAQ:MSFT) closed slightly above the flatline after being labeled a “top large cap pick” for 2024 by Oppenheimer. The endorsement cited Microsoft’s unique position in artificial intelligence (AI) and its potential for a generative AI boost, distinguishing it from competitors facing GPU supply capacity issues.

Legal Victory Boosts Kenvue; Affirm Expands Walmart Partnership

Kenvue Inc (NYSE:KVUE), a consumer-health company spun off from Johnson & Johnson (NYSE:JNJ), experienced a more than 2% increase following a significant legal victory. A judge ruled in favor of the company in a class action lawsuit alleging a link between Tylenol exposure and autism.

Affirm Holdings Inc (NASDAQ:AFRM) announced an expansion of its “buy now, pay later” partnership with Walmart, reaching over 4,500 self-checkout kiosks. The news led to a 15% increase in Affirm’s share price.