Stock Market Recap: Santa Claus Rally Kicks Off with Gains on December 24, 2024
The stock market closed higher on Tuesday, December 24, 2024, in a holiday-shortened trading session, marking the beginning of the highly anticipated Santa Claus rally. Major indexes posted gains, with tech stocks leading the charge, as investors showed optimism heading into the Christmas break.
Market Performance: Indexes End on a High Note
The S&P 500 (SPX) jumped 1.1%, erasing its December losses and closing at 6,040.04 points. This impressive gain not only reversed the mid-month decline but also pushed the index into positive territory for December, with a month-to-date increase of 0.2%.
The tech-heavy Nasdaq Composite (COMP) outperformed other indexes, surging 1.3% to close at 20,031.13. This strong performance contributed to the Nasdaq’s 4.2% gain for December, highlighting the resurgence of technology stocks.
The Dow Jones Industrial Average (DJIA) also participated in the rally, rising 0.9% to 43,297.03. Despite this uptick, the Dow still faces a slight December decline, down 4% for the month.
Why Was the Market Up Today?
Several factors contributed to today’s market upswing:
1. Santa Claus Rally Kickoff: The first day of the traditional Santa Claus rally period, which runs from the last five trading days of the year through the first two of the new year, began on a positive note. Historically, this period has shown a 74% probability of positive returns.
2. Tech Stock Resurgence: Major tech companies like Apple (AAPL), Amazon (AMZN), and chip manufacturer Broadcom (AVGO) helped drive the market higher, continuing their strong performance from the previous day.
3. Holiday Sentiment: The shortened trading session and approaching holiday break may have contributed to positive investor sentiment, with many looking to end the year on a high note.
4. Recovery from Recent Volatility: The market’s gains helped recover from last week’s midweek rout, suggesting resilience in investor confidence.
Notable Stock Movements
Several individual stocks made significant moves during the session:
– Tesla (TSLA): The electric vehicle maker saw its stock surge 7.36% to $462.28, making it one of the day’s top performers.
– Nvidia (NVDA): The chipmaker continued its strong run, gaining 0.39% to close at $140.22.
– American Airlines (AAL): Despite early losses due to a technical issue that briefly grounded flights, the airline’s stock recovered and ended mostly higher, demonstrating resilience on one of the busiest travel days of the year.
– Palantir Technologies (PLTR): The data analytics firm saw its stock rise 2.09% to $82.38.
Upcoming Market Events to Watch
As we head into the final days of 2024, investors should keep an eye on several factors that could impact market performance:
1. Year-End Trading Patterns: The remainder of the Santa Claus rally period, which extends into early January, could set the tone for the start of 2025.
2. Holiday Retail Sales Data: Reports on consumer spending during the crucial holiday shopping season could provide insights into economic health and consumer confidence.
3. Q4 Earnings Previews: As companies prepare to report their fourth-quarter results in January, any early guidance or previews could influence market sentiment.
4. Federal Reserve Policy Outlook: Investors will be watching for any signals about the Fed’s interest rate plans for 2025, following the recent scaling back of rate cut forecasts.
Market Outlook for the Remainder of 2024
With just a few trading days left in the year, the stock market’s performance in 2024 has been stellar. The S&P 500 is on track for an impressive gain of around 26% for the year, despite facing some challenges in December. The strong finish to the year, if maintained through the Santa Claus rally period, could set a positive tone for the start of 2025.
However, investors should remain cautious and vigilant. While seasonal trends like the Santa Claus rally often hold true, they are not guaranteed. The market’s ability to maintain its momentum into the new year will depend on various factors, including economic data, corporate earnings, and geopolitical events.
As we close out 2024, the stock market’s resilience and ability to bounce back from mid-month volatility demonstrate the underlying strength of the U.S. economy and investor optimism. With major indexes near record highs, the stage is set for an interesting start to the new year in the financial markets.
