Wall Street Awaits Santa Claus Rally Amid Mixed Economic Signals

Wall Street trading was mostly flat during shortened Christmas Eve trading, as investors awaited a potential Santa Claus rally. Economic data showed mixed signals, with fast-paced GDP growth but declining consumer confidence. The bull market continued, spurred by AI innovations and rate cut expectations.

Wall Street remained relatively stable during an abbreviated session on Christmas Eve, as traders watched to see if stocks would continue their upward trend in what is traditionally a strong season for the markets. This came as the S&P 500 lingered near its previous all-time high, following a record finish on Tuesday.

The U.S. economy demonstrated its fastest growth in two years in the third quarter, according to delayed federal data, yet softer consumer confidence and flat factory output have prompted caution. Despite initial jobless claims decreasing unexpectedly, market analysts remain unfazed in their outlook for labor conditions and Federal Reserve policy.

Investor hopes are focused on a potential 'Santa Claus rally,' a period historically marked by positive stock movements at year-end. However, trading volumes might be scant as markets close early and observe a holiday pause. Meanwhile, confidence remains bolstered by AI-related optimism and prospective interest-rate reductions as the bull market extends through its third consecutive year of gains.

(With inputs from agencies.)