NEW YORK — As of 1:32 p.m. ET on Wednesday, December 24, 2025, U.S. stocks had already wrapped up a holiday-shortened Christmas Eve session—and they ended it with fresh milestones.
The S&P 500 and the Dow Jones Industrial Average notched new closing records, extending a five-session winning streak as investors rotated back toward AI-linked leaders and kept one eye on the next chapter: expectations for Federal Reserve policy and corporate earnings growth in 2026.
Market snapshot at 1:32 p.m. ET
Because of the Christmas Eve schedule, U.S. stock trading ended early at 1:00 p.m. ET (with markets closed Thursday for Christmas).
By the close:
- S&P 500: 6,932.12, up 0.32%
- Dow Jones Industrial Average: 48,731.81, up 0.60%
- Nasdaq Composite: 23,613.31, up 0.22%
In ETF terms (often used as real-time proxies for the major benchmarks), prices were modestly higher around the early-close window, including SPY near 690.38, QQQ near 623.93, and DIA near 487.01.
Why stocks rose on Christmas Eve: rate-cut bets, AI momentum, and “Santa rally” seasonality
Several themes dominated today’s tape:
1) The market is still pricing in Fed easing—just not immediately
Reuters reported that the market is pricing roughly 50 basis points of rate cuts next year, while expectations for a January cut remain low.
That lines up with broader rates commentary in today’s market coverage: holiday liquidity is thin, but investors are highly sensitive to any data that changes the “how many cuts, how soon” debate.
2) Economic data didn’t derail the soft-landing narrative
The latest weekly jobless claims surprised to the downside: applications fell to 214,000 for the week ending Dec. 20, according to the Labor Department (as cited by AP), reinforcing the view that the labor market is slowing—but not breaking.
3) AI optimism returned after last week’s wobble
Today’s market rally built on a renewed push into big tech and AI beneficiaries. Reuters noted the rebound followed a bout of valuation and capex anxiety—and highlighted that Micron’s upbeat forecast last week helped revive AI-linked momentum.
4) “Santa Claus rally” season is officially underway
Seasonal optimism also made headlines. Reuters pointed out that the “Santa Claus rally” window—the last five trading days of the year plus the first two in January—began today and runs through early January. Reuters
Winners and losers: Nike, Micron, Dynavax jump; Intel slips
Even in a quieter, holiday-thinned session, several single-stock stories moved sharply:
- Nike climbed after disclosures that Apple CEO Tim Cook purchased roughly $3 million in Nike shares, lifting the stock and helping the Dow’s advance.
- Micron Technology extended its surge, with Reuters highlighting the chipmaker as part of the broader AI trade returning to leadership.
- Dynavax Technologies spiked after Sanofi agreed to buy the vaccine maker in a roughly $2.2 billion deal, a major corporate-action headline even on a shortened day.
- Intel fell after a Reuters report said Nvidia halted testing tied to Intel’s 18A manufacturing process, keeping pressure on the turnaround narrative.
On the sector level, Reuters said financials were among the strongest S&P 500 sectors, with bank stocks supporting the broader rally.
Cross-asset check: yields, oil, gold, and bitcoin also shaped sentiment
With stocks near record highs, investors also watched the rest of the dashboard:
- 10-year Treasury yield: slipped to around the low 4.1% area, according to Investopedia’s Christmas Eve wrap (a supportive backdrop for equity valuations).
- WTI crude oil: hovered around $58–$59 per barrel in today’s reporting.
- Gold and silver: continued a powerful run—Investopedia reported both metals set fresh all-time highs again in the session.
- Bitcoin: traded around the $87,000 level in multiple market updates.
The key point for equity investors: lower long-term yields and resilient risk sentiment tend to reinforce the “higher-for-longer earnings, lower-for-longer rates” mix that’s helped keep megacap tech—and the broader index—elevated into year-end.
2026 forecasts and outlook: what strategists are saying on Dec. 24
With 2025 nearly in the books, much of today’s analysis shifted from “what happened” to “what comes next.”
A wide (but mostly bullish) range of S&P 500 targets
A Reuters factbox compiling major bank calls showed 2026 S&P 500 targets spanning roughly 7,100 to 8,100—from BofA Global Research (7,100) on the low end to Oppenheimer Asset Management (8,100) at the high end, with Deutsche Bank at 8,000 among the more optimistic forecasts.
The same Reuters round-up cited a Reuters poll that implies the benchmark could climb to about 7,490 by end-2026 (roughly a ~12% gain).
The core bull case: earnings growth broadens beyond the “Magnificent Seven”
Reuters’ deeper 2026 outlook argued that sustaining strong returns will likely require:
- robust corporate earnings,
- a dovish Fed (without a recession), and
- continued AI spending that actually delivers returns.
On earnings specifically, Reuters reported expectations for S&P 500 earnings growth above 15% in 2026 (with growth broadening beyond the biggest tech names), while the profit-growth gap between the “Magnificent Seven” and the rest of the index is projected to narrow. Reuters
The risks: valuation gravity, AI capex scrutiny, and policy wildcards
Strategists also flagged the downside scenarios:
- If the market loses confidence in the payoff from AI capex, it could mean a flatter—or even down—year, according to one strategist quoted by Reuters.
- Investopedia’s 2026 outlook coverage similarly highlighted concerns about AI becoming “bubble-like,” elevated valuations, and the possibility that volatility persists even if indexes rise. Investopedia
- Reuters also emphasized political and policy uncertainties—especially the coming decision on the next Fed chair and questions around central bank independence—as potential swing factors for 2026 sentiment.
What to watch next: the next session and the year-end runway
The U.S. market calendar is straightforward over the next 48 hours:
- Thursday, Dec. 25: U.S. markets closed for Christmas.
- Friday, Dec. 26: markets reopen, though trading volumes are widely expected to stay light in the final stretch of the year.
From here, investors are likely to focus on:
- whether the “Santa Claus rally” window adds follow-through to record highs, Reuters
- how quickly the market reprices Fed-cut timing after each major data point,
- and whether leadership broadens beyond megacap tech as 2026 positioning begins in earnest.
Bottom line
At 1:32 p.m. ET on Dec. 24, 2025, Wall Street’s Christmas Eve message was clear: record highs are still in play, even with thin holiday liquidity. The near-term driver remains the same mix that carried much of 2025—AI enthusiasm plus easing-rate expectations—while the big 2026 debate is whether earnings can keep justifying premium valuations as the Fed’s next moves (and the policy backdrop) come into sharper focus.
