The New York Stock Exchange closed with mixed results as only three trading days remain before the year-end.
With a shortened 3.5-day trading week due to the Christmas holiday, trading volume significantly declined, and profit-taking weighed on the market. The indices initially fell but later attempted a recovery, which ultimately lacked momentum.
Amid the subdued market, Apple, the largest company by market capitalization, continued its record-breaking performance, edging closer to a $4 trillion valuation.
On December 26 (local time), the Dow Jones Industrial Average rose 28.77 points (0.07%) to close at 43,325.80. The S&P 500 fell 2.45 points (0.04%) to 6,037.59, while the tech-heavy Nasdaq Composite dropped 10.77 points (0.05%) to 20,020.36.
The market's subdued performance was attributed to stronger-than-expected Christmas Eve results, sparking profit-taking among investors.
According to Bespoke Investment, the S&P 500 climbed 1.10% on December 24, marking its best Christmas Eve performance since 1974. Prior to the holiday break, the S&P 500, Nasdaq, and Dow had gained 1.8%, 2.3%, and 1%, respectively, over two trading days.
Investors had high hopes for the so-called "Santa Rally," a phenomenon where stocks typically rise during the last five trading days of the year and the first two trading days of the new year. Since 1950, the S&P 500 has averaged a 1.3% return during this period, significantly outperforming the average seven-day market return of 0.3%.
However, it remains uncertain whether the Santa Rally will regain momentum.
Among the "Magnificent 7" (M7) large-cap tech stocks, Apple (+0.32%) was the only gainer, while the others posted modest declines, except for Tesla (-1.76%). Nvidia slipped 0.21%, ending a four-day winning streak.
Apple reached an all-time high of $260.10 during intraday trading and achieved its highest-ever closing price for the fourth consecutive day. The company's market capitalization now stands at $3.919 trillion, nearing the $4 trillion milestone.
Investment bank Wedbush raised its price target for Apple from $300 to $325, reflecting optimism about its growth prospects.
LPL Financial noted that the M7 stocks have collectively gained about 20% since the U.S. presidential election, significantly outperforming both the S&P 500’s market-cap-weighted and equal-weighted indices.
Other key market movements included:
Tapestry Inc. (Coach's parent company) rose 1.38% to close at a record high of $66.30.
Honda, the second-largest Japanese automaker, saw its U.S.-listed shares surge 4.11%, marking a five-day return of over 20%, following merger talks with Nissan.
Bitcoin-related stocks, such as MicroStrategy (-4.78%) and Coinbase (-1.86%), fell as Bitcoin prices declined.
Robinhood rose 2.02%, while meme stock GameStop climbed 5.94%, continuing a five-day rally with a year-to-date return of 97.90%.
Among S&P 500 sectors, six gained (led by financials, healthcare, and technology), while five declined (notably consumer discretionary and energy).
Michael Jin, Chief Portfolio Manager at UBS Asset Management, described the market as “sleepy,” with institutional investors largely inactive and retail investors dominating trading. He added that year-end performance might not indicate trends for January and February.
Labor market data released on the same day highlighted mixed signals. Initial jobless claims fell by 1,000 to 219,000 last week, the lowest in a month and below market expectations. However, continued unemployment claims rose by 46,000 to 1.91 million, the highest since November 2021, indicating challenges for unemployed individuals in finding new jobs.
The Cboe Volatility Index (VIX) rose 3.22% to 14.73, reflecting heightened market uncertainty.
