Stock Market Firm, Dow Near Highs Ahead Of The New Year

The stock market held firm Friday and booked gains the week shortened by the Christmas Day holiday. The release of the minutes from the Federal Reserve’s December meeting is the banner event next week that will close out trading in 2025.

In Friday’s session, the Nasdaq composite snapped a five-day win streak by falling 0.1%. Nevertheless, it notched a weekly gain of 1.2%. The Nasdaq now sits above its short-term moving averages and its 50-day line. The tech-heavy index’s gain for 2025 has risen to 22.2%.

The S&P 500 ended fractionally lower despite hitting a new high intraday. The benchmark index rose for its second week in a row since testing its 10-week moving average. Its lift for the year now sits at 17.8%.

Decliners on Friday outnumbered advancers on both the New York Stock Exchange and the Nasdaq. But with Christmas Eve’s truncated session, it’s difficult to read anything into trading volume.

Dow Near Highs As Small Caps Lag

The Dow Jones Industrial Average on Friday suffered a meager loss of 20 points, essentially flat, and is holding near highs. Nike (NKE), UnitedHealth (UNH) and Nvidia (NVDA) were among top gainers while McDonald’s (MCD) and Walt Disney (DIS) lagged.

Small caps were nibbled by the bears though, with the Russell 2000 index falling 0.5%. Nevertheless, it squeezed out a slim weekly gain. Growth stocks outperformed, with the Innovator IBD 50 (FFTY) exchange traded fund popping 0.6% Friday.

The 10-year Treasury yield held steady, closing at 4.13%. Oil prices slipped, with West Texas intermediate futures down more than 2% to under $57 per barrel.

IBD is continuing to recommend stock market exposure in the 60%-80% range. Investors should continue to look for opportunities to buy strong stocks clearing buy points. But given that thinner trading volume is likely next week, it justifies keeping some powder dry for now.

Fed Minutes To Lead Shortened Trading Week

Investors should note that, unlike Christmas Eve, the stock market will not close early on New Year’s Eve. However, the stock market will be shut for New Year’s Day.

Next week’s performance could be key to the success or failure of the fledgling Santa Claus Rally. The period is counted from Dec. 24 until Jan. 5.

There will be a paucity of economic data and no earnings reports in the week ahead. The key releases will be the latest Fed minutes, which drop Tuesday, and Wednesday’s release of initial jobless claims. Pending home sales data for November are due Monday.

These Stock Market Groups Shine

A majority of the S&P 500 sectors ended Friday lower. Materials and technology outperformed while consumer discretionary and energy were the worst laggards.

Once again, investors could get a more nuanced insight into the action on the stock market today by studying the relative daily performance of IBD’s 197 industry groups.

Hospitals, metal miners, toy companies, gold miners and gaming software plays all shined. Metals miners outperformed, reflecting a notable move in metals. Silver and platinum jumped more than 10% while palladium popped over 13%. Copper rose almost 5%, while gold was a relative laggard, rising just over 1%.

In addition, Freeport-McMoRan (FCX) was a top performer on the stock market today, finishing the session up 2.1%. It now sits more than 20% above its 50-day moving average.

In contrast, shares of newspapers, cable companies, oil and gas royalty trusts, dairy products plays, and fiber optics companies all struggled.

View General Market Indicators chart page here.

Please follow Michael Larkin on X at @IBD_MLarkin for more analysis of growth stocks.

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