On the 24th, S&P 500 and the Dow Jones Industrial Average hit a record high on the New York stock market on strong employment data. With growing confidence in a soft landing for the U.S. economy, investor sentiment improved ahead of the Christmas holiday.
On the New York Stock Exchange (NYSE), the S&P 500 closed at 6,932.05, up 0.32% from the previous session. The Dow also rose 288.75 points (0.60%) to 48,731.16, setting a new all-time closing record. The tech-heavy Nasdaq gained 0.22% to finish at 23,613.31. The market closed early at 1 p.m. local time for Christmas Eve.
Investors focused on employment figures released that day. According to the Labor Department, initial jobless claims for the week of Dec. 14–20 came in at 214,000. That was below both the market forecast of 225,000 and the prior week's 224,000. Fewer-than-expected people filing for unemployment benefits is seen as a sign that the U.S. job market remains solid and the risk of the economy collapsing abruptly is low.
Adding to the optimism, the final third-quarter gross domestic product (GDP) growth rate came in at 4.3%. That was well above the 3.2% expected by the market. Experts said this shows the U.S. economy has endured high interest rates and is on a stable growth path. Magdalena Ocampo, investment strategist at Principal Asset Management, said, "As long as the unemployment rate doesn't surge, solid economic growth and easing inflationary pressure provide a favorable environment for risk assets such as stocks."
By sector, consumer goods, financials, and semiconductors led the gains. Sportswear corporations Nike jumped 4.6%. Investors piled in after Apple CEO Tim Cook was reported to have purchased about $3 million worth of Nike shares. The fact that a prominent corporate leader bought shares directly was taken as a positive signal for the company's future value.
Semiconductor corporations Micron Technology rose 3.8% to a record high after Citigroup issued a positive report. Financial stock Citigroup also climbed 1.8% to a fresh high. Intel, however, fell on reports that Nvidia halted the adoption of Intel processes in its chip production.
The bond market also showed a steady tone. The 10-year U.S. Government Bonds yield, a gauge of market rates, fell 0.03 percentage point from the previous day to 4.13%. Generally, when rates fall, corporations' capital-raising expense burdens ease, which is a tailwind for stocks.
Uncertainty tied to the next Fed chair is also gradually easing. President Trump has narrowed the shortlist for the next Federal Reserve chair to three to four people and is expected to make a final decision soon. The market expects no drastic policy shifts, whoever becomes chair, given current economic conditions. Bellwether Wealth Clark Bellin strategist said, "Even without additional rate cuts through midyear, the stock market is likely to maintain its current upward momentum."
Expectations also grew for a Santa rally, when stocks typically rise around year-end and the start of the new year. A Santa rally refers to the market's strength over the last five trading days of each year and the first two trading days of the new year. This year, the period runs from the 24th to Jan. 5 next year. Paul Stanley, strategist at Granite Bay Wealth Management, said, "After a spell of volatility, the market started generating revenue just before Christmas," adding, "We expect a classic Santa rally pattern to appear."
International gold prices edged lower to finish at $4,479.42 per ounce, though they briefly soared to $4,555.1 intraday to set a record high. Cryptocurrency Bitcoin fell 0.3% to around $87,409.59.