Stock Market Today: Wall Street Rises at the Start of a Holiday-Shortened Week

Stocks managed to overcome a shaky beginning to end higher on Monday as Wall Street began a holiday-shortened week.

The S&P 500 closed up by 0.7% after dipping 0.5% early in the trading session. Meanwhile, the Dow Jones Industrial Average also bounced back from an early decline, finishing with a modest gain of 0.2%. The tech-focused Nasdaq composite soared 1%.

Leading the market's gains were technology and communication stocks, which helped offset losses in consumer goods sectors.

An example of strong technology performance was Nvidia, which saw its stock rise 3.7%. Broadcom also contributed positively, climbing 5.5%.

On the downside, Walmart dropped 2% while PepsiCo saw a decline of 1%.

In automotive news, Japanese automakers Honda and Nissan announced discussions about a potential merger, which might also include Mitsubishi Motors. Honda's shares surged by 12.7%, while Nissan’s stock remained flat.

Another notable winner was Eli Lilly, whose shares increased by 3.7% after it received regulatory approval for Zepbound, the first and only prescription treatment for adults suffering from sleep apnea.

On the other hand, department store Nordstrom faced a decline of 1.5% after it agreed to a $6.25 billion deal to go private under the ownership of family members and a Mexican retail group.

In terms of numbers, the S&P 500 rose by 43.22 points to finish at 5,974.07. The Dow added 66.69 points, ending the day at 42,906.95, while Nasdaq increased by 192.29 points, closing at 19,764.89.

Traders also received a new reading on consumer sentiment, with the Conference Board reporting a decrease in consumer confidence for December. The index fell to 104.7, a substantial drop from 112.8 in November; expectations were set at 113.8.

This unexpected decline in consumer confidence came on the heels of several strong economic reports last week, including one that indicated the economy grew at a 3.1% annual rate in the summer, surpassing earlier estimates. Reports on unemployment claims indicated that the labor market remains robust.

Additionally, a report released on Friday showed a key inflation measure favored by the Federal Reserve was slightly lower than expected for the previous month. Rising concerns over inflation have been weighing on both Wall Street and the Federal Reserve.

The central bank recently instituted its third interest rate cut of the year; however, inflation has remained stubbornly above the target of 2%. The Fed has indicated that it may implement fewer rate cuts in 2025 due to inflation worries.

Expectations for more interest rate cuts have driven a remarkable 25% gain in the S&P 500 throughout 2024, including 57 all-time highs this year.

Looking ahead to 2025, uncertainties remain due to inflation concerns, the trajectory of the labor market, and evolving economic policies with the incoming President Donald Trump.

“Much of the strong market performance prior to last week was built on the premise of a best-case scenario for 2025,” stated Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.

Treasury yields experienced an uptick in the bond market, with the yield on the 10-year Treasury rising to 4.59% from 4.53% late Friday.

Across the Atlantic, European markets mostly closed lower, while Asian markets saw gains.

Looking forward, Wall Street awaits several key economic reports throughout the week. On Tuesday, the U.S. will publish its November data on newly constructed home sales, followed by an update on unemployment benefits expected on Thursday.

Additionally, U.S. markets will close early at 1 p.m. Eastern on Tuesday in observance of Christmas Eve and will remain shut on Wednesday for Christmas.

Stocks, Economy, Market