US stocks continued their upward momentum on Tuesday, with the Dow Jones Industrial Average (DJI) securing its fifth consecutive record close. The tech-heavy Nasdaq Composite (IXIC) and benchmark S&P 500 (GSPC) also posted solid gains.

The Dow Jones Industrial Average climbed roughly 0.7%, or over 250 points, while the Nasdaq Composite ticked up about 0.7%, and the S&P 500 jumped around 0.6%. These strong gains come despite cautious warnings from Federal Reserve officials regarding rate cuts.

Investors remained optimistic about the prospect of interest rate cuts, pushing stocks higher. However, officials from the Federal Reserve cautioned that it is premature to assume the central bank is done with rate hikes, signaling that policy decisions will be driven by data.

In global markets, the Bank of Japan announced on Tuesday that it will maintain negative interest rates, giving no indication of when it might exit these levels. Despite these cautionary signs, investors are currently looking past them.

Investors are closely monitoring oil prices as more companies, following BP, avoid transits through the Red Sea due to recent attacks on shipping in the region. West Texas Intermediate (WTI) inched up to trade just below $74 a barrel, while Brent crude futures traded above $79 a barrel.

In other news, homebuilder stocks are thriving, driven by investor optimism for potential interest rate cuts by the Federal Reserve. The SPDR S&P Homebuilders ETF and the iShares US Home Construction ETF have jumped more than 50% and nearly 70% year-to-date, respectively. Inventory shortages in the resale market have contributed to increased demand for new homes.

Amidst the market euphoria, Federal Reserve official Tom Barkin has expressed the need for more "conviction" on inflation before considering rate cuts. Barkin emphasized the need for consistency in data to justify such policy decisions.

Student loan debt in the US remains unevenly distributed, with 75% of borrowers owing $40,000 or less. The burden of debt is concentrated among a small percentage of borrowers.

The broadening rally in the stock market has been encouraging, with sectors like financials and small caps surging alongside the tech-heavy market. Over 78% of the S&P 500 stocks were above their 200-day moving average, highlighting the increasing breadth and strength of the current rally.

US housing starts in November surged nearly 15% to reach a six-month high. The strong data indicates increased homebuilding demand amidst a shortage of available homes for sale.

Shares of buy now, pay later company Affirm rose after news that their service will be integrated into self-checkout lines at Walmart. The increasing popularity of buy now, pay later services highlights both their flexibility for consumers and the risks associated with relying on such financial services.

With the positive market outlook, US stocks opened higher on Tuesday, with the Dow Jones Industrial Average inching up roughly 0.1%, the S&P 500 climbing about 0.2%, and the Nasdaq Composite leading the early session with a jump of around 0.3%.

Oil prices also edged higher as companies continued to avoid transits through the Red Sea. West Texas Intermediate climbed just below $73 a barrel, while Brent crude futures traded above $78 a barrel.

Overall, the US stock market rally continues as investors monitor key economic indicators and the prospect of further interest rate cuts.