Wall Street’s main indexes ended higher in a shortened trading session on Christmas Eve, with the S&P 500 and Nasdaq recording their third consecutive day of gains. The session was marked by thin trading volumes, characteristic of the holiday season, and limited market catalysts, offering investors a moment to reflect on recent market movements.
Key Market Highlights
- Index Performance:
At 9:42 a.m. ET, major indexes performed as follows:- Dow Jones Industrial Average: Rose 32.38 points (+0.08%) to 42,939.33.
- S&P 500: Gained 21.68 points (+0.36%) to 5,995.75.
- Nasdaq Composite: Increased 116.55 points (+0.59%) to 19,881.43.
- Sector Leaders:
- Consumer Discretionary and Technology sectors led the S&P 500.
- Broadcom (+2.7%) and Nvidia (+0.7%) were key contributors to index gains.
- Santa Claus Rally:
Markets are in the midst of the “Santa Claus rally,” a historically strong period where the S&P 500 gains an average of 1.3% during the last five days of December and the first two days of January, according to Stock Trader’s Almanac.
Economic Sentiments and Investor Reactions
Hawkish Fed Outlook
The U.S. Federal Reserve eased borrowing costs for the third time this year but projected only two 25-basis-point rate cuts in 2025, down from an earlier forecast of four. This hawkish stance reflects concerns about inflation, influenced by pro-business policies under President-elect Donald Trump.
Traders now expect the Fed to maintain rates between 4% and 4.25% by the end of 2025, slightly higher than previous forecasts.
Investor Optimism
“Investors are breathing a sigh of relief that the hawkish rate cut last week, combined with softer PCE readings, indicate that inflation is not that big of a re-emerging threat,” noted Sam Stovall, chief investment strategist at CFRA Research.
Stock-Specific Highlights
- NeueHealth: Shares surged 64% after the healthcare provider announced a $1.3 billion privatization deal led by New Enterprise Associates.
- American Airlines: Shares fell 1.9% following a temporary grounding of all U.S. flights due to a technical issue.
Key Data Table: Index Performance
| Index | Opening Value | Closing Value | % Change |
|---|---|---|---|
| Dow Jones | 42,906.95 | 42,939.33 | +0.08% |
| S&P 500 | 5,974.07 | 5,995.75 | +0.36% |
| Nasdaq Composite | 19,764.88 | 19,881.43 | +0.59% |
Market Breadth and Metrics
- NYSE Advancers vs. Decliners: 1.21-to-1 ratio.
- Nasdaq Advancers vs. Decliners: 1.07-to-1 ratio.
- 52-Week Highs/Lows:
- S&P 500: 2 new highs, no new lows.
- Nasdaq Composite: 17 new highs, 31 new lows.
Conclusion
The quiet Christmas Eve trading session saw Wall Street gain modestly, buoyed by strength in megacap stocks and optimistic investor sentiment. While concerns about inflation and high valuations persist, the ongoing “Santa Claus rally” offers a glimmer of hope for a positive close to the year.
As markets brace for 2025, the focus will remain on navigating interest rate policies and assessing the sustainability of record-high valuations.
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