Stock Market News Review: SPY Secures Another Record-High as Santa Shows Up for the Rally

The S&P 500 ETF (SPY) clinched a second consecutive record high of $690.82 on Wednesday on a successful first day of the "Santa Rally." The Nasdaq 100 ETF (QQQ) also closed higher and is within 2% of its all-time high.Claim 70% Off TipRanks This Holiday SeasonUnlock hedge-fund level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential The Santa Rally is a seven-day period that falls on the last five trading days of December and the first two trading days of January. Wednesday marked the first day of the rally, while January 5 will be the last. Since 1950, the week-long event has been positive 79% of the time with an average return of 1.3%, according to Investopedia. However, it's worth pointing out that the Santa Rally never materialized in 2023 and 2024. The market tends to perform poorly in January and during the first quarter when Santa fails to show up. When this occurs, January posts an average loss of 2.5%, while the first quarter experiences an average loss of 0.5%, according to Carson Group Chief Market Strategist Ryan McDetrick. Meanwhile, the Department of Labor announced before the market open that initial jobless claims for the week ended December 20 fell by 10,000 to 214,000, less than the consensus estimate of 224,000. These claims act as a measure of layoffs across the country. Continuing jobless claims, which tracks the unemployed population, were 1.923 million, above the estimate of 1.9 million. Following the update, the odds of a 25-bps rate cut at the January 28 Federal Open Market Committee (FOMC) meeting fell lower, intensifying a drop on Tuesday from the Bureau of Economic Analysis (BEA) announcing that U.S. gross domestic product (GDP) grew by 4.3%, above the estimate of 3.3%. The odds sit at 13.3% at the time of writing, down from 15.5% a day ago and 24.4% a week ago. The lower odds can be explained by the Fed's dual mandate of maximizing employment and keeping inflation under control. With the labor market softening, but not showing signs of a sudden deterioration, inflation still above the central bank's target of 2%, and the economy growing at a fast pace, investors are predicting that rates will hold steady. Lower rates can stimulate the labor market but also contribute to rising inflation since they encourage spending and investment. The S&P 500 (SPX) closed with a 0.32% gain, while the Nasdaq 100 (NDX) returned 0.27%. Stay ahead of macro events with our up-to-the-minute Economic Calendar — filter by impact, country, and more.