Major U.S. equities indexes offered a dose of holiday joy for investors, pushing higher during a shortened Christmas Eve trading session.
The S&P 500 gained 1.1% on Tuesday, while strength in the tech sector helped the Nasdaq surge 1.4%. The Dow added 0.9% as financial markets prepared for Wednesday's Christmas break.
Tesla (TSLA) shares powered 7.4% higher, leading the charge for the S&P 500 and spearheading an upbeat trading session for the Magnificent Seven tech stocks. Barclays analysts noted that, while they expect the electric vehicle maker to post record fourth-quarter deliveries, the effect on the stock could be minimal. Rather than short-term metrics, the investment bank believes Tesla's recent momentum hinges on its long-term opportunities in self-driving and artificial intelligence.
Super Micro Computer (SMCI) shares gained 6%, partially recovering from a string of losses that coincided with last week's removal of the stock from the Nasdaq 100 Index. Earlier this month, the server and data storage provider received an extension from the Nasdaq exchange for the filing of its delayed annual report until February.
The December rally continued for shares of Broadcom (AVGO), which added 3.2%. The chipmaker's Christmas advance extended gains posted in the previous session after UBS analysts increased their AI revenue estimates for Broadcom and boosted their price target on the stock.
Starbucks (SBUX) shares ticked 2.8% higher. The union-backed baristas who have been participating in a strike against the coffee chain are expected to return to work tomorrow. A Starbucks executive said Monday that around 97% to 99% of stores will remain open, adding that the strike wasn't expected to have a major effect on operations nationwide.
The weakest Christmas Eve performance in the S&P 500 belonged to shares of Walgreens Boots Alliance (WBA), which slipped 1.2%. The stock enjoyed a bump earlier in December following reports that the pharmacy operator was in talks about selling itself to private equity firm Sycamore Partners, but it has been trending lower since and remains down nearly 65% in 2024.
Shares of industrial chemical supplier Celanese (CE) also fell 1.2%. RBC recently slashed its price target on Celanese stock, citing pressure on the company's margins stemming from high energy costs.
Shares slipped in Tokyo and Shanghai on Wednesday, two of only a handful of world markets open on Christmas day.
Oil prices rose.
Japan's Nikkei 225 index edged 0.1% lower to 38,997.02, while the Shanghai Composite index lost 0.2% to 3,387.41.
Thursday will bring a weekly update on U.S. unemployment benefits.
Also early Wednesday, U.S. benchmark crude oil was up 93 cents at $70.17 per barrel. Brent crude, the international standard, picked up 6 cents to $73.23 per barrel.
The dollar rose to 157.37 Japanese yen from 157.11 yen. The euro rose to $1.0431 from $1.0397.
On Tuesday, stocks closed higher on Wall Street in a shortened holiday session. Gains in Big Tech stocks helped the S&P 500 to a 1.1% gain, while the Dow Jones Industrial Average rose 0.9%. The Nasdaq composite climbed 1.3%.
Advancers outnumbered decliners by more than 3-to-1 on the New York Stock Exchange.
Broadcom rose 3.2%, Apple gained 1.1% and Amazon closed 1.8% higher. Super Micro Computer climbed 6%.
Tesla jumped 7.4% for the biggest gains among S&P 500 stocks.
American Airlines shook off an early loss and ended with a 0.6% gain after the airline briefly grounded flights nationwide due to a technical issue.
Elsewhere in the market, U.S. Steel rose 1.9% a day after an influential government panel failed to reach consensus on the possible national security risks of the nearly $15 billion proposed sale to Nippon Steel of Japan.
NeueHealth surged 74.9% after the health care company agreed to be taken private in a deal valued at roughly $1.3 billion.
Tuesday’s U.S. market “Santa rally” comes as the stock market enters what’s historically been a very cheerful season. The last five trading days of each year, plus the first two in the new year, have brought an average gain of 1.3% since 1950.
So far this month, the U.S. stock market has lost some of its gains since President-elect Donald Trump’s win on Election Day, which raised hopes for faster economic growth and more lax regulations that would boost corporate profits. Worries have risen that Trump’s preference for tariffs and other policies could lead to higher inflation, a bigger U.S. government debt and difficulties for global trade.
Even so, the U.S. market remains on pace to deliver strong returns for 2024. The benchmark S&P 500 is up 26.6% so far this year and remains within roughly 1% of the all-time high it set earlier this month — its latest of 57 record highs this year.
