On Christmas Eve, both U.S. and Canadian stock markets marked significant gains, underscoring investor optimism and setting the stage for what historically is known as the Santa Claus rally. This phenomenon, typically observed during the last five trading days of the year and the first two of the new year, proved to be exceptionally bullish this holiday season.
Trading on December 24, 2024, saw the Dow Jones Industrial Average rise by 390.08 points, positioning itself at 43,297.03 — the best performance on Christmas Eve since 2022. Meanwhile, the S&P 500 saw an increase of 65.97 points, ending the session at 6,040.04, and the tech-heavy Nasdaq Composite jumped 266.24 points to close at 20,031.13. This upward momentum was widely reported, with MarketWatch emphasizing, “The S&P 500 was surging 0.8%, on track for its best Christmas Eve since 2011.”
Market analysts were quick to highlight the technical gains across various sectors, as the Santa Claus rally has exhibited strong historical performance. According to data from Bank of America, the S&P 500 has historically produced average returns of approximately 1.3% during this trading window, achieving positive performance 79% of the time since 1950. This year’s opening session hinted at the continuation of this trend, showcasing broad-based gains especially prominent within technology stocks.
The Christmas Eve session was conducted under abbreviated hours, closing at 1 p.m. Eastern Time, and was followed by the market's closure on December 25 due to the Christmas holiday. Notably, the bond market wrapped up at 2 p.m. on Tuesday as well.
According to CNN, the session was characterized as “quiet,” reflecting the typical holiday lull. Despite the calm, Wall Street analysts noted the potential for the setup of another Santa rally, echoing familiar economic patterns seen over the years. This sentiment was echoed by traders who reported confident buying behavior leading up to the holiday.
Internationally, Canada’s main stock index also mirrored this positive trend, with the S&P/TSX composite index gaining 97.84 points to settle at 24,846.82, contributing to the broader regional economic optimism. Reports reveal the Canadian dollar fluctuated slightly but held firm against its U.S. counterpart, rounding out the scene of economic activity on both sides of the border.
The day's performance wasn’t just limited to equities; commodities also saw movements. February crude oil increased by 86 cents, reaching US$70.10 per barrel. Precious metals, including February gold, ended the day up US$7.30 to settle at US$2,635.50 per ounce, as investors sought safe-haven assets amid market uncertainties.
Experts noted additional economic indicators to watch closely. Initial jobless claims scheduled for release on Thursday are expected to be 225,000, slightly up from the previous week’s reading of 220,000. Observing these trends can yield insights for investors, especially as holiday shopping metrics come under scrutiny in the new year.
Despite there being guidance about the stock and bond markets temporarily halting due to external market calendars, many analysts remain convinced of the enduring strength of the markets. With confidence bolstered by historical performance and positive trends noted during the Christmas shopping season, the expectation is set for engagement levels to sustain beyond the holidays.
Overall, as market activity heads toward the start of the new year, investors have plenty to reflect upon from this remarkable Christmas Eve. With statistical performances hinting at positive trends for the upcoming days alongside optimistic market sentiment, 2025 could be shaping up to be another intriguing year for the stock markets. The festivities may have contributed to the buoyancy observed this Christmas Eve, but the underlying fundamentals of market performance showcase potential wealth creation heading forward.
