Dow tops 30,000 for the first time ever as Biden transition begins

New York(CNN Business) Investors have a lot to be thankful for this holiday-shortened week — including the Dow passing the 30,000 milestone for the first time as stocks posted solid gains Tuesday to extend Monday's rally.

The Dow finished the day up nearly 455 points, or 1.5%. The blue chip index hit a new all-time high in the process, finally topping the 30,000 mark. The Dow is now up more than 5% in 2020.

The S&P 500 closed 1.6% higher and the Nasdaq ended 1.3% higher on Tuesday, and they too are not far from all-time highs. The S&P 500 has gained 12.5% this year, while the Nasdaq has surged 34%.

The latest catalyst: It appears that a formal transition from President Donald Trump to President-elect Joe Biden is finally underway.

News came Monday that the General Services Administration is starting the so-called ascertainment process, which allows Trump administration officials to coordinate with the Biden team.

And that follows more promising coronavirus vaccine developments on Monday, as well as sources confirming to CNN that former Federal Reserve chair Janet Yellen will be Biden's nominee for Treasury Secretary.

Some market strategists were quick to point out that the Dow's rise above 30,000 is a more psychological milestone than anything else. But it does show just how bullish investors are.

"Although 30,000 isn't much different than 29,999, there is something special about those big milestone numbers. This is yet another reminder of how far stocks and the economy have come since the depths of March," said Ryan Detrick, chief market strategist for LPL Financial, in a report.

Along those lines, the CNN Business Fear & Greed Index is now showing levels of Extreme Greed.

It's also worth noting that Tuesday's rally comes as many investors get ready for the Thanksgiving holiday. The stock market in the US is closed Thursday and only open for a half day of trading on Black Friday.

So it may be a mistake to make too much of this week's market moves. It may not be solely about Biden, Yellen and the transition.

"It's also important to keep in mind we're in for a holiday period in the US — and lighter volumes, news flow and attendance could certainly have an impact as well," said Yousef Abbasi, global market strategist at StoneX, in a report.

Beyond the three main indexes, the Russell 2000 -- an index that is home to smaller American companies that are expected to benefit from a rebound in the US economy -- gained nearly 2% and also hit a new record high on Tuesday.

"A new high is not in itself any kind of danger sign," said Invesco global market strategist Brian Levitt in a report Tuesday. "If you believe that the world will continue to get better for most inhabitants of Planet Earth, then you should expect markets to trend upward over long periods."

Oil prices rallied as well, lifting big energy stocks like Occidental Petroleum (OXY) and Marathon Oil (MRO).

Shares of travel related companies, such as airlines, cruise lines and hotels, also continued to rebound on hopes of a more normal economy in 2021. Shares of Carnival (CCL), Delta (DAL) and Marriott (MAR) were all higher.

The euphoric trading frenzy for several momentum investments continued as well Tuesday.

Tesla, which is set to be added to the S&P 500 next month, surged to a new record high and is now worth more than $500 billion. Tesla CEO Elon Musk is now worth as much as Bill Gates.

But the rally is broadening out, as it's not just big tech stocks and other momentum plays that are soaring. Warren Buffett's Berkshire Hathaway (BRKB), FedEx (FDX), Union Pacific (UNP), Target (TGT) and Comcast (CMCSA) also hit new all-time highs.

Cannabis stocks Aurora (ACB), Tilray (TLRY), Canopy Growth (CGC) and Cronos (CRON) also soared again Tuesday, extending their stellar run this month as investors bet that a Biden administration could seek to decriminalize marijuana at a federal level. Several more states also legalized recreational cannabis.

And cryptocurrency darling bitcoin continued to move closer to a record high. Bitcoin prices were up nearly 4% and hovering around $19,100 Tuesday — just below their December 2017 peak of $19,783.