A fresh record for the S&P 500 on Tuesday didn’t feel like a neat storybook ending — more like a twist.
The index closed at 6,909.79 as tech giants carried the market higher: Nvidia rallied again, Alphabet climbed, and Amazon and other megacaps provided the heft that pushed benchmarks into the green. The Nasdaq rose about 0.6% and the Dow added roughly 79 points to finish near 48,442.41. Yet the backdrop was prickly: the government’s delayed third‑quarter GDP reading showed the U.S. economy growing at a 4.3% annualized pace, well above expectations. That stronger growth nudged traders to pare back bets on near‑term rate cuts even as markets remained bullish.
Markets at a glance — momentum with caveats
Stocks notched a fourth consecutive daily gain, a tidy run that keeps hopes of a seasonally friendly Santa Claus rally alive. LPL Financial’s Adam Turnquist noted that the S&P has historically averaged a 1.3% return during the traditional seven‑to‑nine day Santa period, a tempting stat for bulls. But beneath the headline indices, breadth was narrow — a handful of large-cap tech names were carrying the load. That mix, at once concentrated and upbeat, leaves the market vulnerable to any macro surprise.
Futures traded largely flat after the close, reflecting the market’s tension: investors still price in multiple cuts before the end of next year, but those odds were trimmed after the GDP surprise. CME FedWatch pricing shifted toward a higher chance the Fed will stand pat at its January meeting.
Why the GDP print matters (and why it complicates the Fed story)
A 4.3% GDP print is the kind of number that makes policymakers pause. The advance reading suggested resilient consumer spending and sturdier-than-expected demand, which in turn raises the prospect that inflation may not fall as fast as some forecasts hope. The Fed watches these dynamics closely; stronger growth raises the bar for immediate rate relief.
At the same time, other data were less sanguine: consumer confidence slipped for a fifth straight month, and the Fed’s preferred inflation gauge — the PCE index — showed a stickier reading in the quarter. Those mixed signals explain the tug-of-war in market positioning: investors still want to own growth assets, but they’re less willing to assume a quick pivot to easier policy.
Commodities stealing the headlines
If stocks were a soft drumbeat, commodities were a cymbal crash. Gold surged past $4,500 an ounce and silver climbed above $70 — both extending a dramatic run that has precious metals on pace for their best year in decades. Copper punched through $12,000 per ton, setting a fresh record as supply disruptions and trade shifts bid the metal higher. These moves matter: higher commodity prices can feed through to input costs and consumer prices, further muddying the Fed’s path.
Investors are also watching geopolitical risks and supply shocks that help explain the rally in metals. Miners and related industrial names rallied alongside raw materials, while energy prices showed modest gains amid concerns about export disruptions.
Corporate and regional moves
On the corporate front, a mix of deals and product approvals animated trading — Novo Nordisk jumped after U.S. approval of a Wegovy pill formulation — while some tech IPOs cropped up in filings, including an Alphabet‑backed fleet‑management software company preparing to list. Across the globe, Asian markets were mostly higher following the U.S. session, though trading volumes were light as many exchanges near the Christmas holiday operated on shortened schedules.
The mood on Main Street vs. Wall Street
There’s a recurring theme in recent releases: a bifurcated economy. High‑income households continue to spend, supporting headline GDP, even as many consumers report weakening confidence and hold back on big purchases. That K‑shaped feel shows up in markets too — where a small set of large cap tech winners can propel indices higher even while broader participation lags.
Tech leadership this year has been built partly on the AI narrative — chipmakers and cloud firms remain in focus as enterprises race to deploy AI tools. That thread ties into developments in AI product features and platform capabilities; for example, Google’s expanding agentic features and product integrations are reshaping expectations of where AI will show up next in everyday services, and deeper research integrations are pushing the envelope on how search and productivity tools interact. See how Google is evolving its agentic AI features in products like Maps and others and why that matters for the tech ecosystem in Google’s AI Mode expands agentic booking features and Gemini’s Deep Research moves toward searching your Drive and Gmail.
What traders are left to wrestle with
Markets closed on a high note while policy uncertainty widened. Strong growth argues for patience from the Fed; stubborn inflation gauges and roaring metals give critics reason to warn against premature easing. Short holiday trading and thin liquidity add the usual holiday caution — one headline can pivot sentiment quickly.
Keep an eye on a handful of short‑term data points: weekly jobless claims, early January Fed‑speak, and any updates to inflation gauges. For now, traders are straddling optimism about big‑tech momentum and wariness about the macro picture — a messy, but familiar, end‑of‑year scene.
(Markets will trade an early close for Christmas Eve; the New York Stock Exchange will be closed on Christmas Day.)