Wall St hovers near record highs in post-Christmas session

Dec 26 (Reuters) – U.S. stock indexes hovered near all-time highs in thin post-Christmas trading on Friday, supported by signs of a resilient economy and renewed investor interest in AI-related companies.

The benchmark S&P 500 hit an intraday record high before pulling back slightly, while the blue-chip Dow Jones Industrial Average was about 0.5% from its December 12 peak.

U.S. stocks rebounded after last week’s selloff, when AI and technology stocks faced pressure from concerns over lofty valuations and high capital expenditures denting profits.

However, resilient economic data, the prospect of further policy easing under a new Federal Reserve chair next year and fresh appetite for AI stocks fueled a market recovery, putting the S&P 500, Dow and Nasdaq on track for a third straight year of gains.

“2026 is likely going to be a ‘prove-it’ year for markets. Companies must deliver tangible productivity and margin gains from AI and other investments,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.

The S&P 500 has risen more than 17% so far in 2025, driven by megacap tech companies for much of the year, but the rally has broadened of late, with investors piling into cyclical sectors such as financials and materials.

Traders are waiting to see if the “Santa Claus rally” — a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac — can happen this time. That period began on Wednesday and will run through January 5.

At 11:42 a.m. ET, the Dow Jones Industrial Average fell 65.06 points, or 0.13%, to 48,666.10. The S&P 500 lost 0.48 points, or 0.01%, to 6,931.57, while the Nasdaq Composite gained 12.11 points, or 0.05%, to 23,625.41.

Nvidia climbed 1.4% after the AI chip designer agreed to license chip technology from startup Groq and hire its CEO.

Target rose 1.7% after the Financial Times reported the retailer is facing pressure from hedge fund Toms Capital Investment Management, which has made a significant investment in the company.

U.S.-listed shares of precious metal miners such as First Majestic, Coeur Mining and Endeavour Silver rose between 0.3% and 2.2%, as silver and gold prices smashed fresh records again. [GOL/]

Declining issues outnumbered advancers by a 1.37-to-1 ratio on the NYSE and by 1.71-to-1 on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and no new lows, while the Nasdaq Composite recorded 33 new highs and 126 new lows.

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)