US stock markets concluded a quiet and abbreviated trading session on Christmas Eve with little movement, as major indices hovered near flat lines. The shortened day saw investors taking a breather ahead of the holiday, with the benchmark S&P 500 index maintaining its position close to a historic peak.
Market Performance on a Quiet Trading Day
The trading activity on Monday was notably subdued due to the early market closure at 1:00 p.m. ET for the Christmas holiday. The S&P 500 index edged down by a marginal 1.77 points, closing at 4,769.83. This kept the index tantalizingly close to its record closing high of 4,796.56, which was set in January of the previous year.
Similarly, the Dow Jones Industrial Average saw a minor decline of 18.38 points, finishing the session at 37,336.24. The technology-heavy Nasdaq Composite index managed a slight gain, adding 27.59 points to end at 14,961.70.
Key Drivers and Economic Data in Focus
The muted session followed the release of a key economic indicator that bolstered investor confidence. Data showed that the US Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose by 2.6% for the year through November. This figure marked the smallest annual increase since February 2021 and aligned with economists' forecasts, reinforcing hopes that inflationary pressures are easing.
This cooling inflation data has been a central pillar supporting the recent market rally, as it fuels expectations that the Federal Reserve may begin to cut interest rates in the coming year. The prospect of lower borrowing costs is generally seen as positive for corporate profits and stock valuations.
Global Context and Market Sentiment
The steady performance on Wall Street also reflected a broader positive trend in global markets. Notably, Japan's Nikkei 225 index reached a significant milestone, closing at its highest level since February 1990. This upward momentum in international markets contributed to a cautiously optimistic sentiment among traders.
Market analysts observed that the thin trading volumes, typical for a holiday-shortened week, amplified the lack of decisive movement. With many participants away, the markets entered a period of consolidation after a strong recent rally. All eyes are now on the market's trajectory as it heads into the final trading sessions of the year, with the S&P 500's attempt to breach its all-time high remaining a key point of interest for global investors, including those in India tracking international financial trends.
