Indexes hover near historic highs
Wall Street’s main indexes traded close to record levels in thin post-Christmas sessions, as investors positioned for further gains next year. The S&P 500 briefly touched a new intraday high, edging toward the 7,000-point threshold, while the Dow Jones hovered just below its recent peak. Optimism around interest rate cuts and resilient earnings continues to underpin market sentiment.
U.S. equities have rebounded in recent weeks after a choppier stretch driven by concerns over artificial intelligence valuations and elevated capital spending. Renewed confidence in economic resilience and expectations of a more accommodative Federal Reserve next year have helped lift stocks back toward all-time highs.
Earnings expectations fuel confidence
Analysts project that profits for S&P 500 companies will rise 15.5% in 2026, accelerating from the growth expected in 2025. This outlook supports the view that markets can continue advancing if companies deliver tangible productivity gains, particularly from AI-related investments.
So far in 2025, the S&P 500 has climbed more than 17%, led primarily by megacap technology stocks. Recently, however, the rally has broadened, with increased inflows into cyclical sectors such as financials and materials, signaling a healthier and more diversified market advance.
Sector moves and standout stocks
Technology stocks led sector gains, while utilities and industrials lagged. Shares of Nvidia advanced after the chipmaker announced a licensing agreement and a key executive hire, reinforcing enthusiasm around AI infrastructure. In contrast, Biohaven slipped following disappointing trial results for an experimental treatment.
Coupang surged after reassuring investors that leaked customer data had been deleted. Precious metal miners also gained as gold and silver prices climbed to new highs, adding momentum to the materials space.
Seasonal patterns and market breadth
Traders are watching closely to see whether the traditional “Santa Claus rally” materializes, a period that historically delivers gains in the final trading days of December and early January. Early signs suggest mixed participation, with advancing stocks outpacing decliners on the New York Stock Exchange but the opposite pattern seen on the Nasdaq.
Market breadth reflected selective strength, with the S&P 500 posting multiple new 52-week highs while the Nasdaq continued to show some internal weakness. Still, the overall tone remains constructive as investors position for a critical year ahead.
