Tech Surge Fuels Santa Claus Rally as US Stocks Rise in Holiday Trading
Staff Editor US Stocks Rise as Tech Sector Leads Gains in Shortened Trading Session
US stocks edged higher on Tuesday, with the technology sector driving most of the gains in a shortened trading session ahead of the Christmas holiday. The positive movement marks the beginning of the Santa Claus trading window, a period historically associated with bullish market performance.
The S&P 500 rose 0.14% to 5,982.87, while the tech-heavy Nasdaq Composite advanced 0.40% to 19,838.09. The Dow Jones Industrial Average, however, saw a slight dip of 0.03%, or 10 points, closing at 42,892.81.
The Santa Claus trading window, which covers the last five trading days of the year and the first two of the new year, has historically been a positive period for stocks. Since 1950, the S&P 500 has shown an average return of 1.3% during this time frame. When including data from 1928, the average gains increase to 1.6%, according to Bank of America.
Markets closed early on Tuesday, with the stock market shutting down at 1 p.m. and the bond market following at 2 p.m. Both markets will remain closed on Wednesday for Christmas.
No economic data was released on Tuesday, but investors are looking ahead to Thursday’s initial jobless claims report, with expectations set at 225,000 claims.
In other news, American Airlines faced a temporary grounding of flights due to a technical issue, while a top economist predicted a 0% probability of a US recession in 2025. Consumer confidence has reportedly decreased to levels near recession territory ahead of Donald Trump’s second administration.
As the year comes to a close, Wall Street analysts have begun releasing their S&P 500 targets for 2025, providing insight into market expectations for the coming year.
With the holiday season in full swing and the Santa Claus rally potentially underway, investors will be closely watching market performance in the final days of 2023 and the start of 2024.
