U.S. equities extended their year-end advance in a shortened pre-Christmas session, with the S&P 500 pushing to a new record high as macroeconomic data reinforced the narrative of economic resilience. Despite lighter trading volumes, the benchmark index’s move reflected growing investor confidence that solid growth, contained labor-market stress, and easing inflation fears may continue to support corporate earnings into the new year.

Wall Street Momentum and Record Levels

The S&P 500 rose 0.47% to 6,942 on December 24, marking the highest level in its history. Over the past month, the index has gained 2.61%, while its year-on-year advance stands just under 15%, underscoring the strength of the 2025 equity rally. Gains were broad but measured, with investors appearing more inclined to maintain exposure rather than aggressively add risk ahead of the holiday break. The Dow Jones Industrial Average and Nasdaq also traded modestly higher, extending momentum built earlier in the week.

Economic Data Reinforces the Bullish Case

Confidence was bolstered by a surprisingly strong third-quarter GDP reading, which showed the U.S. economy expanding at an annualized pace of 4.3%, well above consensus expectations. The data highlighted robust private consumption, suggesting that higher interest rates and tariff-related concerns have not meaningfully curtailed household spending. For equity markets, this reduces the risk of a sharp earnings slowdown and supports the view that economic growth remains compatible with current valuation levels.

Labor market data offered a more nuanced picture. Initial jobless claims declined, while continuing claims rose, reinforcing the idea of a low-hiring, low-firing environment. This fragmentation suggests a labor market that is cooling gradually rather than deteriorating abruptly — a scenario often viewed favorably by equity investors seeking stability without the inflationary pressure of excessive wage growth.

Technology Stocks and Valuation Sensitivity

Large-cap technology stocks largely held onto recent gains, even as debate over stretched valuations persists. The sector continues to act as both a driver of index-level performance and a focal point for risk management. Intel shares slipped after reports that Nvidia paused a test involving Intel chips, a reminder that even in a strong market, company-specific developments can quickly alter sentiment. This dynamic reflects a more selective phase of the rally, where fundamentals increasingly matter.

Looking Ahead: Confidence Tested by Valuations

As markets head into the final days of the year, attention is shifting toward 2026 earnings expectations and the sustainability of current multiples. The combination of strong growth data and stable labor conditions supports optimism, but record highs also raise the risk of complacency. Investors will be watching upcoming inflation readings, Federal Reserve signaling, and early earnings guidance closely, as these factors may determine whether the S&P 500’s record run evolves into a durable expansion or faces a period of consolidation.