S&P 500 reaches a record high as ‘Santa Claus rally’ kicks off

The S&P 500 hit a record high on Wednesday, with broad gains across sectors supporting the main indexes during a shortened Christmas Eve session.

The benchmark S&P 500 touched an intraday record high of 6,921.42 points, surpassing its previous peak in October, as investors continued to bet on more interest rate cuts from the Federal Reserve next year following mixed economic data.

The U.S. economy grew at its fastest pace in two years in the third quarter, government data showed on Tuesday, after the release was delayed by a 43-day federal shutdown. Worsening consumer confidence in December and a flat reading on November factory production, however, tempered the outlook.

Data on December 24 showed new applications for U.S. jobless benefits unexpectedly fell last week.

“Despite ongoing seasonal volatility, initial jobless claims remain in ranges consistent with relatively steady labor market conditions and don’t change our outlook for the labor market or Fed policy,” said Nancy Vanden Houten, lead economist at Oxford Economics.

Trading volumes were thin, with U.S. stock markets set to close at 1 p.m. ET (1800 GMT) on Wednesday. The markets will remain shut on Thursday for Christmas.

Micron Technology jumped 4% to scale a record high, extending its rally after issuing a strong forecast last week. Bank stocks were also among the top boosts to the S&P 500, with financials rising 0.4% to a new peak.

Recent gains in U.S. 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 December 24 and would run through January 5.

At 10:36 a.m. ET, the Dow Jones Industrial Average rose 167.50 points, or 0.35%, to 48,610.95. The S&P 500 gained 10.24 points, or 0.15%, to 6,920.24, while the Nasdaq Composite lost 2.48 points, or 0.01%, to 23,558.35.

U.S. 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 hovering near its lowest 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 watch potential successors to Fed Chair Jerome Powell, after President Donald Trump said on Tuesday anyone who disagrees with him would “never be the Fed chairman.”

Nike climbed 4.7% after Apple CEO Tim Cook, the sportswear giant’s lead independent director, bought about $3 million worth of shares.

Intel fell 1.6% following a report that said Nvidia has halted tests to manufacture on Intel’s 18A chipmaking node after initial tests.

Dynavax Technologies surged 38.5% after French drugmaker Sanofi said it would buy the U.S. vaccines company for around $2.2 billion.

Advancing issues outnumbered decliners by a 1.69-to-1 ratio on the NYSE and by a 1.33-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and two new lows, while the Nasdaq Composite recorded 43 new highs and 117 new lows.

—By Sruthi Shankar and Shashwat Chauhan, Reuters