Wall Street’s main indexes advanced yesterday, as gains in a handful of megacap and growth stocks bolstered benchmarks in a truncated trading session before Christmas.
With megacap stocks having outsized influence on markets, their performance is often a key driver of indexes. When coupled with reduced trading volumes and few other catalysts, as many investors take time off for the holidays, this is even more pronounced.
All the so-called Magnificent Seven megacap stocks climbed yesterday, led by the 5.1 per cent advance by Tesla.
The automaker’s rise helped push the Consumer Discretionary 1.9pc higher. It was the top gainer among the nine S&P sectors in positive territory.
Elsewhere, chip manufacturers were also buoyant. Broadcom and Nvidia were up 3pc and 1.1pc, respectively, while Arm Holdings climbed 3.9pc, on course to regain much of the ground lost in the previous session when it was hit by a lost court verdict.
At 11.22am Eastern time, the S&P 500 gained 41.80 points, or 0.70pc, to 6,015.87 points, while the Nasdaq Composite rose 197.63 points, or 1.00pc, to 19,962.51. The Dow Jones Industrial Average climbed 173.43 points, or 0.40pc, to 43,080.38.
“Investors are breathing a sigh of relief that maybe the hawkish rate cut last week combined with the softer PCE reading indicate that inflation is not that big of a re-emerging threat,” said Sam Stovall, chief investment strategist of CFRA Research.
“As a result, maybe this market will end up creeping higher between now and the end of the year.”
After a stellar run to record highs following the November election, which sparked hopes of pro-business policies under US President-elect Donald Trump, Wall Street’s rally hit a bump this month as investors grappled with the prospect of higher interest rates in 2025.
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