NEW YORK – US stocks closed higher on Dec 24, as the Dow Industrials and S&P 500 registered record closing highs in a broad rally during a holiday-shortened session.
Indexes have been climbing in recent days, buoyed in part by a rebound in AI-related names after last week’s selloff that was triggered by concerns about inflated valuations and high capital expenditures denting profits.
Each of the major indexes recorded their fifth straight session of gains.
But recent data showed the economy remains resilient, and the market is still pricing in roughly 50 basis points of rate cuts from the Federal Reserve in 2026, although expectations for a January cut are low, according to CME’s FedWatch Tool.
Data on Dec 24 showed new applications for US jobless benefits unexpectedly fell last week.
“Yields are behaving, volume is light, but the same issues remain in place – AI is strong, there is talk of some positives here, new OpenAI and Meta models, that will get the chatter up,” said Mr Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“The Fed is unlikely to lower rates again, at least for a while. Who knows what happens when May comes and we get a new head of the Fed? But we have a very low probability of a January cut.”
The Dow Jones Industrial Average rose 288.75 points, or 0.6 per cent, to 48,731.16, the S&P 500 gained 22.26 points, or 0.32 per cent, to 6,932.05, and the Nasdaq Composite gained 51.46 points, or 0.22 per cent, to 23,613.31.
Trading volumes were thin. The US markets will remain shut on Dec 25 for Christmas.
Volume on US exchanges was 7.61 billion shares, compared with the 16.21 billion average for the full session over the last 20 trading days.
Micron Technology shares climbed 3.8 per cent to end the session at a closing record of US$286.68, continuing their rally after the company issued a strong forecast last week.
Bank stocks also supported gains, and financials were among the best-performing of the 11 S&P 500 sectors, with a 0.5 per cent gain. The energy index was the only sector in negative territory on the day.
Recent gains in US stocks have spurred hopes of a “Santa Claus rally”, a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.
That period began on Dec 24 and runs through Jan 5.
US equities have swung sharply this year as tariff-related headlines, concerns about high valuations in technology and AI companies, and rapidly shifting interest-rate expectations boosted volatility.
Wall Street’s “fear gauge” was holding at levels not seen since December 2024. Still, the bull market, which began in October 2022, stayed intact as optimism around AI, rate cuts and a resilient economy supported sentiment, with all three main indexes set for their third straight yearly gain.
In the year ahead, global markets will be closely watching potential successors to Fed chairman Jerome Powell, after President Donald Trump said on Dec 23 that anyone who disagrees with him would “never be the Fed chairman.”
Nike jumped 4.6 per cent after Apple CEO Tim Cook, the sportswear giant’s lead independent director, bought about US$3 million (S$3.8 million) of shares.
Intel shed 0.5 per cent following a report that Nvidia has halted tests to manufacture chips using Intel’s 18A production process.
Dynavax Technologies surged 38.2 per cent after French drugmaker Sanofi said it would buy the US vaccines company for around US$2.2 billion. US-listed shares of Sanofi edged up 0.1 per cent.
Advancing issues outnumbered decliners by a 2.37-to-1 ratio on the NYSE and by a 1.63-to-1 ratio on the Nasdaq.
The S&P 500 posted 22 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 56 new highs and 160 new lows. REUTERS