In a shortened session on Christmas Eve, stock markets demonstrated substantial gains throughout Tuesday's trading, with principal stock indices extending the upward trajectory observed in the preceding days. The key averages pushed further upwards towards the end of the session, closing at their peak levels for the day. The Dow climbed 390.08 points, equating to an increase of 0.9%, to conclude at 43,297.03. The Nasdaq rose by 266.24 points or 1.4%, finishing at 20,031.13, while the S&P 500 increased by 65.97 points or 1.1%, settling at 6,040.04.
The robust performance on Wall Street was attributed to traders seizing the opportunity to acquire stocks at relatively reduced prices, following last week’s slump that saw the Dow and the S&P 500 plunge to their lowest levels in over a month. The rally in stocks may have been bolstered by ongoing optimism regarding the market outlook, despite signals from the Federal Reserve indicating plans to cut interest rates less aggressively than previously anticipated for the coming year.
The extent of the rally may have been exaggerated due to below-average trading volumes, as many traders took time off ahead of the upcoming Christmas holiday on Wednesday. The early market closure on Tuesday possibly also influenced some traders to remain on the sidelines. The absence of significant U.S. economic data likely contributed to the quieter trading environment, as reports on durable goods orders and new home sales were released earlier on Monday after President Joe Biden issued an executive order to close the federal government for Christmas Eve.
Brokerage stocks were among the leading performers, propelling the NYSE Arca Broker/Dealer Index up by 1.7%. Retail stocks also exhibited notable strength, with the Dow Jones U.S. Retail Index gaining 1.5%. Additionally, sectors such as networking, computer hardware, and banking experienced significant upward momentum, keeping pace with most other major categories.
In overseas markets, Asia-Pacific stock exchanges showed mixed results. Japan’s Nikkei 225 Index declined by 0.3%, whereas Hong Kong’s Hang Seng Index advanced by 1.1% and China’s Shanghai Composite Index increased by 1.3%. In Europe, markets saw moderate gains during light pre-holiday trading. The U.K.'s FTSE 100 Index rose by 0.4% and France’s CAC 40 Index edged up by 0.1%, while German markets remained closed for the day.
In the bond markets, treasuries stabilized near the unchanged mark following early weakness. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, decreased slightly, down by less than a basis point, standing at 4.591%.
