New York (CNN) — Just a few weeks ago, the stock market stumbled over fears that artificial intelligence stocks might be in a bubble . Now stocks are back within reach of a record high.

Thank the Federal Reserve.

The market has rebounded from a dip in early November as investors have leaned into bets that the Fed will cut interest rates this week at its last policy meeting of the year.

Interest-rate cuts can boost stocks by lowering savings rates and borrowing costs for individuals and businesses, in turn encouraging spending and investing, spurring business activity and increasing corporate earnings.

Fed rate cuts can also lower the yield on short-term government bonds and cash equivalents like money market funds, making higher-yielding assets like stocks more attractive to investo

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