US stocks rallied on a shortened trading day for Christmas Eve, with the S&P 500 gaining 1.1% and the Dow Jones adding 390 points, marking its best performance on the holiday since 2022. The Nasdaq 100 led the rally, rising 1.3%, its strongest Christmas Eve performance since 2000. Tech stocks were a key driver of the gains, with Tesla soaring 7.3%, Amazon up 1.8%, Apple rising 1.1%, and Broadcom jumping 3%. This follows strong performances on Friday and Monday, propelling major indexes closer to their record highs after a recent dip prompted by concerns over the Federal Reserve’s actions. Wall Street is now focused on the outlook for interest rates, with most expecting the Fed to keep rates steady in January and March. US stock indices are on track for a strong year, with the Nasdaq 100, S&P 500, and Dow Jones all set to post gains between 15% and 30%, driven by a rally in chipmakers amid growing optimism about AI demand.
The BSE Sensex erased early gains to close slightly below the flatline at 78,473 on Tuesday, trimming the rebound from the previous session to remain close to the one-month low touched last week as markets continued to assess the outlook of the Indian economy and the impact that higher credit costs from the US may have. Minutes from the RBI’s last meeting hinted that the central bank may deliver its first rate cut this cycle in February to accommodate for the slowdown in Indian growth. This capped the increase in Indian bond yields, which refrained from following the recent surge in long-dated US borrowing costs following signals of a hawkish Fed. Banks and industrial companies led the declines in the session, with JSW Steel, Tata Steel, and the State Bank of India falling more than 1%. The National and Bombay Stock Exchanges will be closed for Christmas and Boxing Days to reopen on Friday.
