U.S. equity markets opened the holiday-shortened week with broad gains on Monday, December 22, extending a technology sector recovery that began late last week. The S&P 500 advanced 0.64% to 6,878.49, while the Dow Jones Industrial Average added 0.47% to 48,362.68 and the Nasdaq Composite rose 0.52% to 23,428.83.
Technology stocks sustained momentum from Micron Technology's strong earnings guidance and recent inflation data that came in below expectations. This combination has positioned both the S&P 500 and Dow Jones Industrial Average within 1% of their December 11 record closing levels.
Nvidia delivered the most significant individual contribution to the S&P 500's performance. According to Reuters reporting, the company informed Chinese clients of plans to begin shipments of its second-most powerful AI chips before the Lunar New Year holiday in mid-February. Micron shares gained 4%, with broader semiconductor sector strength lifting the PHLX semiconductor index 1.1%.
Market strategist Ken Polcari of Slatestone Wealth described the current trading environment as likely to "continue to churn," noting that while Monday saw gains, he wouldn't be surprised by subsequent pullbacks before further rallies.
Ten of the eleven S&P 500 sectors closed higher, with materials leading at 1.4% and energy adding 1.1% amid rising commodity prices. Financials gained 1.3% to reach a record closing level, while the technology sector itself advanced 0.4%.
The CBOE volatility index, Wall Street's primary fear gauge, registered its lowest closing level since December 13, 2024, settling at 14.08. Trading volume reached 14.57 billion shares, below the 20-day average of 16.9 billion, with further declines expected ahead of Christmas holiday closures.
U.S. equity markets will operate on shortened hours Wednesday before closing entirely Thursday for Christmas. The traditional Santa Claus rally period begins Wednesday and extends through January 5, historically delivering average S&P 500 gains of 1.3% over the final five trading days of December and first two of January.
Artificial intelligence optimism, evidence of economic resilience, and expectations for monetary policy easing have collectively outweighed tariff concerns. Major U.S. indexes remain positioned for their third consecutive annual advance, with the S&P 500 showing 17% year-to-date appreciation.
This week's economic calendar includes preliminary third-quarter GDP figures, December consumer confidence data, and weekly jobless claims. Polcari identified Tuesday's GDP release as "the last real piece of economic data that anyone really cares about" before year-end.
Individual stock movements included Tesla's 1.6% gain following Delaware Supreme Court restoration of CEO Elon Musk's 2018 compensation package. Warner Bros. Discovery advanced 3.5% after Oracle co-founder Larry Ellison committed a $40.4 billion personal guarantee for equity financing supporting Paramount Skydance's acquisition offer. Paramount shares climbed 4.3%.
Clearwater Analytics Holdings surged 8.1% after private equity consortium Permira and Warburg Pincus secured an approximately $8.4 billion acquisition agreement for the investment software provider, including assumed debt.
Market breadth showed advancing issues outnumbering decliners by ratios of 2.15-to-1 on the NYSE and 1.61-to-1 on the Nasdaq. The S&P 500 recorded 42 new 52-week highs against five lows, while the Nasdaq Composite saw 113 new highs and 128 new lows.
