U.S. stocks pushed into uncharted territory on Wednesday, with the S&P 500 notching its first intraday record in more than a month as investors returned aggressively to artificial intelligence-linked stocks and renewed bets that the Federal Reserve will cut interest rates again next year.

The benchmark index rose as much as 0.2% to 6,920.88 points, edging past its previous intraday high of 6,920.34 set on October 29. That earlier peak came during a powerful surge in heavyweight technology names, led by Nvidia, which helped lift the combined market value of the index above the $5 trillion mark for the first time.

Wednesday’s move underscores a revival in risk appetite following a turbulent November, when markets pulled back sharply on concerns over stretched valuations in big technology stocks and fears that enthusiasm around AI-linked companies had run too far, too fast. From its October high, the S&P 500 slid as much as 5.7% last month as investors reassessed positioning, even as Nvidia delivered upbeat third-quarter earnings that reinforced its dominance in the AI chip market.

Sentiment has since turned more constructive. A benign U.S. inflation report and a steady jobs print have reinforced expectations that the Fed is nearing the end of its tightening cycle, with markets increasingly pricing in further rate cuts in 2026. Lower borrowing costs tend to support equity valuations, particularly for growth stocks whose earnings are expected further into the future, helping to draw investors back into large-cap technology and AI names as the year-end approaches.

The renewed momentum in the AI trade gathered pace last week after Micron Technology issued a stronger-than-expected profit forecast, signaling sustained demand for memory chips used in data centers and AI applications. CEO Sanjay Mehrotra delivered the warning during the company’s latest earnings call, telling investors that tight conditions across memory markets are likely to persist for years rather than quarters.

“Sustained and strong industry demand, along with supply constraints, are contributing to tight market conditions and we expect these conditions to persist beyond calendar 2026,” Mehrotra said, tempering expectations that new capacity will quickly ease shortages.

The outlook helped lift sentiment across the semiconductor space, which remains a key pillar of the broader U.S. equity rally.

Market leadership, however, has broadened beyond technology alone. As tech stocks swung in recent weeks, investors also rotated into more cyclical sectors such as financials and materials, providing additional support for the S&P 500 and aiding its recovery from November’s slump. Financial stocks have benefited from resilient economic data and stable credit conditions, while materials have drawn support from expectations of improved industrial demand.

So far this year, U.S. equities have delivered strong gains. The S&P 500 is up more than 17% year to date, the tech-heavy Nasdaq has climbed over 21%, and the blue-chip Dow Jones Industrial Average has advanced more than 13%. The performance gap highlights the continued dominance of technology and AI-linked stocks in driving market returns, even as other sectors have recently joined the rally.

With major indexes hovering near record levels, investor focus is shifting toward the sustainability of earnings growth and the path of monetary policy in the months ahead. For now, optimism around artificial intelligence, combined with expectations of easier financial conditions, is keeping U.S. stocks firmly supported as markets head into the final stretch of the year.

British Petroleum has agreed to sell a 65% stake in its iconic Castrol lubricants business to U.S.-based infrastructure investor Stonepeak in a deal generating approximately $6 billion in net proceeds, valuing the unit at an enterprise value of $10.1 billion, including debt.

The transaction, announced on Christmas Eve, represents BP’s largest asset sale to date and propels the company past the halfway mark in its ambitious $20 billion divestment program by 2027, aimed at strengthening the balance sheet and simplifying operations amid a volatile energy market.

BP will retain a 35% minority interest in a newly formed joint venture, preserving exposure to Castrol’s growth while allowing an option to exit fully after a two-year lock-up period.

All proceeds will be directed toward reducing net debt—standing at $26.1 billion as of Q3 2025—toward a target range of $14-18 billion by 2027, while funding accelerated shareholder returns, including potential share buybacks or dividend enhancements.

Interim CEO Carol Howle, who assumed the role in October 2025 following Murray Auchincloss’ abrupt departure, described the deal as “a very good outcome for all stakeholders,” highlighting its role in realizing shareholder value amid Castrol’s strong momentum (nine consecutive quarters of year-over-year earnings growth).

“With this, we have now completed or announced over half of our targeted $20 billion divestment programme,” Howle said, emphasizing reduced complexity and sharper focus on integrated core businesses like upstream oil/gas and low-carbon energy.

Stonepeak, managing $71 billion in assets with a focus on energy infrastructure and real assets, is partnering with Canada Pension Plan Investment Board (CPPIB)—which will commit up to $1.05 billion for an indirect stake through its infrastructure arm—to drive Castrol’s expansion.

Stonepeak Managing Director Trent Vichie praised Castrol’s “iconic brand” and innovation pipeline, including emerging products like immersion cooling fluids for data centers and sustainable lubricants.

The sale process, initiated in May 2025 with extensive bidder interest, attracted suitors including India’s Reliance Industries (potentially expanding its Jio-BP joint venture), Saudi Aramco (seeking downstream diversification), and private equity firms Apollo Global Management and Lone Star Funds.

Stonepeak emerged victorious after competitive bidding, with UBS advising the buyer and Goldman Sachs handling BP’s side.

Castrol, established in 1899 as “CC Wakefield & Company” and rebranded in 1960, was acquired by BP (then Burmah-Castrol) in 2000 for $4.7 billion. The business, generating $2.5 billion in 2024 revenue with ~7,000 employees across 100+ countries, specializes in premium lubricants for automotive, marine, aviation, and industrial applications, including EV fluids and data center cooling solutions.

It holds a 20% global market share in passenger car lubricants and has partnerships with automotive giants like BMW, Volkswagen, and Ford.

Market and Analyst Reaction

BP shares opened up 1.3% on Wednesday before settling around 0.9% higher, trading near 426p in thin holiday volume.

The stock is up approximately 9% year-to-date after a 15.7% decline in 2024, buoyed by leadership changes, cost cuts (targeting $2 billion savings in 2026), and upstream discoveries like the Tiber field extension in the Gulf of Mexico (adding 200 million barrels equivalent).

Analysts hailed the deal as an “early Christmas present” and a “positive step,” reinforcing debt reduction and downstream refocus.

Stephen Isaacs of Alvine Capital, a BP shareholder, noted the CEO change as potentially “the last piece of the jigsaw” for turnaround, while Dan Boardman-Weston of BRI Wealth Management predicted further divestments to refocus on “bread and butter” oil/gas exploration.

The transaction aligns with BP’s broader strategic reset under new Chairman Albert Manifold, including a partial U-turn on aggressive renewables targets (capping low-carbon spend at $6-8 billion annually through 2030) to prioritize hydrocarbons amid shareholder demands for returns.

It follows last week’s appointment of Meg O’Neill—current Woodside Energy CEO—as BP’s next permanent chief executive, effective April 1, 2026.

O’Neill, the first woman and external hire to lead a top-five oil major, replaces Murray Auchincloss after less than two years amid shareholder pressure over underperformance.

BP’s leadership churn—four CEOs in six years—reflects challenges adapting to energy transition pressures.

The London-listed company has underperformed peers like Shell (+15% YTD) and ExxonMobil (+12%), with declining annual profits in 2023 ($13.8 billion from 2022’s record $27.7 billion) and 2024 ($9.3 billion), driven by lower oil prices (Brent averaging $80/bbl in 2024 vs. $100 in 2022) and refining margins.

Q3 2025 results showed underlying replacement cost profit of $2.3 billion, beating estimates on higher production (2.4 million boe/d) but down from the prior year.

Expected to close by the end of 2026, subject to regulatory approvals (including antitrust in key markets like India, where Castrol holds 25% share), the Castrol divestment underscores BP’s pivot toward simplicity, profitability, and shareholder returns—potentially paving the way for further portfolio rationalization in a volatile energy landscape marked by OPEC+ cuts and net-zero transitions.