Investors are in a festive mood as the S&P 500 index of major US company shares reached a new all-time high on a shortened Christmas Eve trading session. The benchmark index touched an intraday record of 6,921.42 points, surpassing its previous peak set in October.
The rally comes as investors remain optimistic about the prospect of further interest rate cuts from the Federal Reserve next year. There is also lingering relief following the release of the latest GDP report, which showed the US economy grew faster than expected in the July-September quarter.
Leading the charge was athletic apparel giant Nike, whose shares rose 4.6% to reverse some of the losses suffered last week after the company reported weaker sales in China and an impact from President Trump’s tariffs. Chipmaker Micron also provided a boost, with its stock cheering Wall Street after posting strong financial results.
“The so-called ‘Santa rally’ has well and truly arrived on Wall Street,” said Marcus Williams, a financial analyst at The Update Desk. “Investors are feeling buoyed by the prospect of continued monetary policy support and solid economic growth, which is driving stocks to new record highs.”
However, Williams cautioned that the market’s euphoric mood could be short-lived, with potential risks on the horizon. “While the current rally is certainly impressive, investors would be wise to remain cautious,” he said. “Geopolitical tensions, trade uncertainties, and a potential slowdown in the global economy could all pose challenges in the new year.”
Nonetheless, the S&P 500’s latest milestone is likely to be welcomed by many investors, who have endured a rollercoaster ride in 2019. The index has now gained over 28% since the start of the year, putting it on track for its best annual performance since 2013.