santa Claus rally lifts S&P 500

The S&P 500 gained more than 1% on the first day of the Santa Claus Rally (SCR).

Now what?

Full SCR period has never been lower, up 7 out of 7.

Final 6 days? Higher 5 of 7, with two small losses and up 1.7% on avg.

🎅💪 pic.twitter.com/dwCKraVxAA

— Ryan Detrick, CMT (@RyanDetrick) December 26, 2024

The S&P 500 rose 1.1% to 6,040.04 on Christmas Eve, while the Dow Jones Industrial Average gained 390.08 points, or 0.91%, to settle at 43,297.03. The Nasdaq Composite climbed 1.35% to 20,031.13, helped by a 7.4% jump in tech stocks. The New York Stock Exchange closed early at 1 p.m. ET, and the bond market also shut down at 2 p.m. for Christmas Eve. Markets will remain closed on Wednesday for Christmas Day.

Stock market outlook: Auto sales data, record dates – Top cues to watch in New Year’s first weekhttps://t.co/jiQK3yvrZl

— ET NOW (@ETNOWlive) December 29, 2024

Tuesday marked the start of the seasonal Santa Claus rally, which traditionally occurs during the last five trading days of December and the first two days of January. Historically, the S&P 500 has averaged a return of 1.3% during this period, significantly higher than the market’s average seven-day return of 0.3%, according to LPL Research.

Market Outlook: Bull run in new year 2025’s first week? Experts see buying opportunities in THESE stockshttps://t.co/GAO3tuDNJk

— ET NOW (@ETNOWlive) December 29, 2024

“There’s a lot of good to think about, but at the same time, you want to be restrained in your enthusiasm because the market has rallied,” said Paul Hickey, Bespoke Investment Group co-founder, on “Squawk Box.”

Looking at the most traded stocks on US exchanges today w/a market capitalization >$500mln, one might get the impression that the stock market resembles a casino. pic.twitter.com/WeGsPKfDoX

— Holger Zschaepitz (@Schuldensuehner) December 26, 2024

With two straight winning days, the S&P 500 is up 1.8% this week, while the Dow has gained about 1%. The strong rally in megacap tech has lifted the Nasdaq up 2.3% week to date. The S&P 500 also turned positive for the month with a 0.1% gain. The Nasdaq has rallied 4.2% in December, with Google parent Alphabet up nearly 9% and Netflix rallying about 34% for the month. The blue-chip Dow, however, is down about 3.6% in December, on track for its worst monthly performance since April. On Christmas Eve, Jefferies analysts expressed a positive outlook on toy sales this holiday season, describing store environments as well-trafficked with lower inventory levels compared to earlier in the season. They noted strong sales in board games, both in-store and online, with sequentially lower discounts from peak Black Friday levels. “Walmart and Target stores allocated more space to toys since Cyber Monday,” the analysts observed. However, it has been a mixed period for toy stocks.

santa Claus rally boosts tech stocks

Mattel shares have risen over 11% year to date, while Hasbro shares are down more than 5%. Recently, Hasbro’s stock has declined nearly 13% month to date, whereas Mattel shares fell 6%. Among notable stocks, American Airlines shares slipped just under 1% after the carrier briefly grounded all flights due to a technical issue. Meanwhile, semiconductor stocks continued their rally, with Nvidia shares adding 2%. Big bank stocks also saw gains of more than 1% amid news surrounding annual stress tests. Palantir shares hit new highs on Tuesday, climbing more than 4% during the session and marking another milestone in an impressive run. Year to date, the stock has surged over 390%—a performance that has surprised Wall Street, with current trading levels nearly double the average analyst price target. Looking ahead to 2025, investment opportunities may lie with companies such as First Solar, according to Trivariate Research. Although First Solar has posted year-to-date gains of around 8%, it has struggled under President-elect’s forthcoming term due to fears about potential policy changes affecting the Inflation Reduction Act. Additionally, Warren Buffet’s Berkshire Hathaway stocks have significantly underperformed, sliding nearly 58% year to date. Treasury yields continued their upward trend this week, with the 10-year yield climbing 3 basis points to 4.613%, its highest since May 30. Similarly, the 30-year yield rose to 4.808%, reaching levels not seen since late April. American Airlines shares recovered slightly in the premarket after a nationwide ground stop was canceled. The carrier had briefly halted all flights due to a technical issue, warning of disruptions during the peak holiday travel season. The stock, which had fallen over 3% in premarket trading, was last down 0.7%. U.S.-listed shares of Honda added more than 2% in Tuesday’s premarket trading, continuing the automotive giant’s recent rally.