Wall St hovers near record highs

Post-Christmas session sees three main indexes set for double-digit annual gains

BENGALURU:

US stock indexes hovered near all-time highs in thin post-Christmas trading on Friday, supported by signs of a resilient economy and renewed investor interest in AI-related companies.

The benchmark S&P 500 hit an intraday record high before pulling back slightly, while the blue-chip Dow Jones Industrial Average was about 0.5% from its December 12 peak.

US stocks rebounded after last week's selloff, when AI and technology stocks faced pressure from concerns over lofty valuations and high capital expenditures denting profits.

However, resilient economic data, the prospect of further policy easing under a new Federal Reserve chair next year and fresh appetite for AI stocks fuelled a market recovery, putting the S&P 500, Dow and Nasdaq on track for a third straight year of gains.

Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.

Traders are waiting to see if the "Santa Claus rally" - a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader's Almanac - can happen this time. That period began on Wednesday and will run through January 5.

At 11:42 am ET, the Dow Jones Industrial Average fell 65.06 points, or 0.13%, to 48,666.10. The S&P 500 lost 0.48 points, or 0.01%, to 6,931.57, while the Nasdaq Composite gained 12.11 points, or 0.05%, to 23,625.41.

Nvidia climbed 1.4% after the AI chip designer agreed to license chip technology from startup Groq and hire its CEO.