On Tuesday, technology stocks spearheaded a significant rally on Wall Street as trading continued in a shortened session in anticipation of Christmas.
The S&P 500 increased by 1.1%, marking its third consecutive gain. The Dow Jones Industrial Average saw a rise of 0.9%, while the Nasdaq composite, which is heavily weighted toward tech stocks, climbed by 1.3%.
Major technology companies, such as Apple, Amazon, and the chip manufacturer Broadcom, played a key role in lifting the market. However, the upward momentum was widespread, with the number of advancing stocks on the New York Stock Exchange outpacing those that declined by a ratio of over three to one.
Broadcom experienced a notable rise of 3.2%, Apple saw an increase of 1.1%, and Amazon closed the day up by 1.8%. Super Micro Computer had an impressive gain of 6%. Among the S&P 500 stocks, Tesla stood out with a 7.4% surge, marking the largest increase.
In a notable move for the airline industry, American Airlines rebounded from an early setback to finish with a 0.6% gain, despite having grounded its flights temporarily due to a technical glitch.
In other market news, U.S. Steel increased by 1.9% following the prior day’s deliberation by a critical government panel, which could not reach an agreement on the national security implications connected to a nearly $15 billion sale proposal to Nippon Steel from Japan.
Healthcare company NeueHealth skyrocketed by 74.9% after announcing its plans to go private in a transaction valued at around $1.3 billion.
All in all, the S&P 500 surged by 65.97 points, reaching a level of 6,040.04. The Dow advanced by 390.08 points to settle at 43,297.03, while the Nasdaq rose by 266.24 points to close at 20,031.13.
In the bond market, Treasury yields remained stable, with the yield on the 10-year Treasury bond showing little change at 4.59%. European markets generally closed on a positive note, and Asian markets mostly also reported gains.
The recent rally in the U.S. stock market aligns with the historical trend of a favorable period as the year wraps up. Historically, the final five trading days of the year, followed by the first two in January, have averaged a gain of 1.3% since 1950. This phenomenon, commonly referred to as the “Santa rally,” is often associated with strong January performance and positive returns for the upcoming year.
Despite experiencing a pullback from early month’s gains following the election of President-elect Donald Trump— which initially raised optimism for accelerated economic growth and eased regulations— there are growing concerns that proposed tariffs and other policies might heighten inflation, escalate U.S. government debt, and complicate global trade negotiations.
Regardless, the stock market is still on track to yield robust returns for 2024, with the benchmark S&P 500 up 26.6% for the year, remaining close to its all-time high achieved earlier this month— the latest of 57 record highs set this year.
U.S. markets are scheduled to be closed on Wednesday in observance of Christmas, and investors are looking forward to several upcoming economic reports, including a weekly update regarding unemployment benefits on Thursday.
