CNBC Daily Open: It's a boom, it's a bubble, it's still not enough for investors: It's AI

Investors can't get enough of artificial intelligence, despite worries over the sector's excessively high valuations.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite rose Tuesday stateside, with all three notching new intraday highs. The major averages were juiced by gains in tech. Nvidia popped nearly 5%, while Microsoft climbed roughly 2%.

Both Apple and Microsoft reached a market capitalization of over $4 trillion after their shares rose. It was the first time Apple hit that milestone, though it closed just shy of that level.

Tech companies can't get enough of each other, either.

Nvidia announced a $1 trillion investment in Nokia, which the Finnish company said will go toward developing its AI plans. For those, like me, who remember Nokia as a company that made the most desirable and bullet-proof phones: It primarily produces cellular equipment now.

Meanwhile, with its 27% stake in OpenAI's for-profit business, Microsoft is potentially sitting on a goldmine — provided AI finds its footing as a sustainable, revenue-generating business in the long run. OpenAI on Tuesday announced it had completed its restructuring as a nonprofit with a controlling stake in its for-profit arm.

It's not just Microsoft. Investors who have poured money into tech could potentially gain big — as Cathie Wood of Ark Invest says, "If our expectations for AI … are correct, we are at the very beginning of a technology revolution."

The Fed has a rate cut plus a bunch of other things on its plate this week. Here's what to expect

Markets are assigning a nearly 100% probability that the Federal Open Market Committee will approve a second consecutive quarter percentage point, or 25 basis point, reduction in the federal funds rate. The overnight lending benchmark is currently targeted between 4%-4.25%.

Beyond that, policymakers are likely to debate, among other things, the future path of reductions, the challenges posed by a lack of economic data and the timetable for ending the reduction in the Fed's asset portfolio of Treasurys and mortgage-backed securities.

— Jeff Cox