Santa Claus Rally Falters: Dow Rises, S&P 500 and Nasdaq Dip Amid Rising Unemployment Claims
Staff Editor Stock Indexes Close Mixed in Post-Christmas Trading Session
U.S. stock indexes closed mixed on Thursday in the first trading session following Christmas, marking the second day of the Santa Claus rally period. This comes as new jobs data indicates a rise in continuing unemployment claims to a three-year high.
The Dow Jones Industrial Average edged up approximately 29 points, closing 0.1% higher at 43,325.80. However, the S&P 500 and Nasdaq Composite experienced slight declines, with the S&P 500 closing nearly flat at 6,037.59 and the Nasdaq down 0.1% at 20,020.36.
The mixed performance occurs during the Santa Claus rally, a period historically known for significant gains. Typically, the S&P 500 gains an average of 1.3% during this time. This year’s rally began strongly on Christmas Eve with notable gains for the Dow and S&P 500.
Historical data suggests that a positive Santa Claus rally often leads to stronger market performance in the following year. When the rally is positive, the S&P 500 averages a 1.4% return in January and a 10.4% annual return. Conversely, negative performance during the rally period has been associated with lower returns.
On the employment front, continuing claims for unemployment surged to 1.91 million, reaching the highest level in over three years. Initial jobless claims were reported at 219,000, slightly below the expected 225,000.
In other market news, potential headwinds for chipmakers loom due to slower AI spending, according to a Nvidia supplier. Goldman Sachs has outlined three ways a trade war with China could impact U.S. profits. Toyota stock surged 9% following a report on plans to double profitability, while Citi predicts healthcare stocks will surge in 2025 after a challenging year.
As the year draws to a close, investors will be closely watching these trends and their potential impact on market performance in the coming months.
