Key Points
- The S&P 500 reached a record high of 6,910.3 points this week. The U.S. economy grew at a robust 4.3% rate in the third quarter.
- Jobless claims came in lower than expected, showing a resilient labor market.
- Stock markets close early on Wednesday and remain closed for Christmas Day.
- Investors still anticipate interest rate cuts in 2026 despite strong growth.
Wall Street started the holiday break on a high note this Wednesday. The S&P 500 hit a brand-new record high, reaching 6,932 points during morning trade. Investors are optimistic because recent economic reports indicate the U.S. economy is stronger than previously thought. While the Dow and NASDAQ were little changed on Wednesday morning, the overall mood remains positive as the seasonal “Santa Claus rally” continues.
Much of this confidence comes from the third-quarter growth numbers. U.S. gross domestic product (GDP) grew at an impressive 4.3% rate, exceeding most analysts’ expectations. This report suggests that the economy is holding up well despite high prices and interest rates. Traders are essentially betting that a strong economy will lead to higher corporate profits in the coming year.
On Wednesday morning, the government also released new data on jobs. Fewer people filed for first-time unemployment benefits than experts predicted, though the number of people staying on benefits rose slightly. These mixed signals didn’t significantly affect the market.
Instead, most traders focused on finishing their work before the holiday. Because it is Christmas Eve, the stock market will close early today at 1.00 PM ET. It will stay closed on Thursday for Christmas Day and reopen for a regular session on Friday.
Even though the economy is booming, many people still expect the Federal Reserve to lower interest rates sometime in 2026. Usually, the Fed only cuts rates when the economy is struggling, but investors hope they will eventually ease up to keep the momentum going.
For now, the seasonal trend of stocks rising at the end of December appears to be holding. With the S&P 500 sitting at an all-time high, many investors are heading into the holidays feeling like they received an early gift from the market.
