S&P 500 Finishes at Record – US Market Wrap

A relatively quiet session on Wall Street ahead of Christmas saw stocks touch all-time highs, with further signs that the labor market is not deteriorating rapidly reinforcing bets on a soft economic landing.

Investors hoping for a Santa Claus Rally, which typically spans the final five trading sessions of the year and the first two of the new one, saw the S&P 500 advance at the start of that period amid thin trading volumes. Bond yields declined, while the dollar wavered.

The subdued trading contrasted with the sharp volatility earlier in the year driven by tariff-related turmoil that pushed the equity benchmark close to a bear market. Since then, stocks have rebounded strongly, with every dip quickly bought and fear of missing out dominating investor sentiment.

While the rally briefly lost momentum late in the year as enthusiasm around AI was reassessed, expectations that the Fed will have additional scope to cut rates in 2026 continued to support optimism around corporate profits.

As traders digested the latest economic data, they maintained expectations that the Fed will deliver two quarter-point rate cuts next year, one more than officials’ median projection.

Applications for US unemployment benefits declined last week, underscoring seasonal volatility in the data. The latest figures are consistent with a labor market experiencing relatively low layoffs, a trend that has held throughout the year despite elevated economic uncertainty.

The S&P 500 hovered near 6,930. The VIX fell to its lowest level of the year. Intel shares declined after a report that Nvidia halted testing of Intel’s manufacturing process for advanced chips. Nike climbed about 5%.

The yield on the 10-year Treasury fell three basis points to 4.13%, while the dollar was little changed.