The S&P 500 enters Christmas Eve having set a new record close of 6,909.79 points last Tuesday. The index is just below its all-time intraday high of 6,920.34. The DOW JONES is only 260 points away from its closing record, in force since December 11 at 48,701.40 points, while its highest level of the year was at 48,886.86 points on the 12th.
Investors are still waiting the long-awaited Santa Claus rally. This rally, whose name was coined by Yale Hirsch, founder of the Stock Trader’s Almanac in 1972, occurs between the last five business days of the year and the first two of the new one. In this case, it would span from the market opening on December 24 to the second business day of 2026, or January 5.
According to Adam Turnquist, chief technical strategist at LPL Financial, The S&P 500 has recorded an average gain of 1.3% over the course of these seven business dayswith positive results 78% of the time. The typical average market return is just 0.3%, with a positivity rate of 58%, Turnquist explains in a note to his clients.
“The momentum heading into the end of the year suggests a favorable scenario for a positive Christmas rally, a historically bullish signal for January and next year«, says the analyst. «While the overall market breadth remains somewhat limited for an index close to all-time highs, the trend is moving in the right direction, driven by a rotation towards cyclical sectors. A close above the S&P 500’s December high could pave the way for the next bullish leg above the 7,000-point milestone.”
On Tuesday, the indices managed to close higher in a day marked by the publication of the GDP. Shortly before the opening, the Commerce Department released its reading of the US gross domestic product for the third quarter, which stood at 4.3%beating the Dow Jones consensus estimate of 3.2%. The report, which had been delayed due to the government shutdown, initially led traders to lower their expectations for interest rate cuts early next year. However, fed funds futures trading still indicates two rate cuts by the end of 2026, according to CME’s FedWatch tool.
The president of the United States, Donald Trumphas questioned the market’s reading of the Fed, stating that he expects the new president he appoints to the institution to lower rates even as Wall Street performs well. «»I want to have a market like we have not had in many decades,» he stated on his social networks, «a market that rises with good news and falls with bad newsas it should be, and as it was.”
Investors should keep in mind that the New York Stock Exchange will close trading on December 24 at 1:00 p.m. ET (7:00 p.m. CET), while it will be closed on Thursday for Christmas. On Friday it will reopen its doors with its usual hours.