S&P 500, Dow Hit Record Highs as Santa Rally Kicks Off
The S&P 500 closed at 6,932 and the Dow at 48,731 on Christmas Eve, both all-time records, as the traditional year-end rally window opens.
Wall Street wrapped up Christmas Eve with a gift for bulls.
The S&P 500 rose 0.32% to close at 6,932.05, notching another all-time high. The Dow Jones Industrial Average gained 288.75 points, or 0.60%, finishing at 48,731.16—also a record. The Nasdaq Composite added 0.22% to settle at 23,613.31.
Markets closed early Wednesday for the holiday and remain shut Thursday for Christmas Day.
Santa Rally Window Opens
The gains mark the start of the traditional "Santa Claus rally"—the stretch covering the last five trading days of December and the first two of January. Historically, the S&P 500 has risen an average of 1.3% during this period since 1950, according to the Stock Trader's Almanac.
Whether that pattern holds in 2025 remains to be seen, but the setup looks favorable. The benchmark index has now gained for five consecutive sessions.
What's Driving the Move
Third-quarter GDP came in sharply above expectations at an annualized 4.3%, reflecting robust consumer spending. Holiday retail sales jumped 4.2%, according to Visa data, with e-commerce and electronics leading the gains.
The economy's resilience has shifted rate expectations. Fed funds futures now imply just one or two quarter-point cuts in 2026, down from earlier forecasts of three or more. That's a headwind for bond prices but hasn't dented equity enthusiasm.
Individual Movers
Nike stood out, climbing 4.6% after Apple CEO Tim Cook disclosed he purchased $3 million in shares. The vote of confidence came after Nike reported disappointing quarterly results last week.
Micron Technology gained 3.8%, extending its post-earnings rally. Citigroup rose 1.8% to fresh highs.
Intel moved in the opposite direction, falling 0.5% on reports that Nvidia halted testing of Intel's 18A chip manufacturing process.
Year-to-Date Performance
The S&P 500 has now gained over 17% in 2025. The Dow is up roughly 16%, while the Nasdaq Composite has climbed more than 20%.
Looking ahead to 2026, analysts project S&P 500 earnings growth of over 15%, building on 2025's 13% increase. The gap between the "Magnificent Seven" megacaps and the rest of the index is expected to narrow, with 23% earnings growth forecast for the tech giants versus 13% for remaining constituents.
Trading Resumes Friday
U.S. markets reopen Friday, December 26, for a full trading session. Volume is typically light in the days between Christmas and New Year's, but that doesn't mean volatility is off the table—thin liquidity can amplify moves in either direction.
For now, the bulls are heading into the new year with momentum at their backs and fresh records on the board.