Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - US stock markets just closed at a new record high right before the Christmas break. However, this rally is happening while recent economic data is sending some seriously mixed signals to investors.
Key Takeaways
- S&P 500 broke the 6,909 level, fueled by a rally in big tech stocks like Nvidia.
- US economic growth in Q3 was strong, but inflation remains sticky at high levels.
- The Fed is expected to hold rates steady in January due to the conflicting macro data.
According to AP News, the S&P 500 climbed 0.5 percent to 6,909.79 at Tuesday's close. NVIDIA Corporation was the main MVP driving this move, with its stock popping 3 percent.
This rally was also supported by gains in other big tech names amidst thin trading volume. Alphabet Inc. and Amazon.com, Inc. both posted significant gains that helped prop up the major index.
The Growth vs. Inflation Dilemma
US government reports show the economy grew at a 4.3 percent annual rate during the third quarter. However, PCE inflation data actually ticked up to 2.8 percent in the same period.
Dominic Pappalardo from Morningstar Wealth noted that this report makes the Fed’s policy position even trickier going forward. The central bank now has to balance the risk of persistent inflation against potential weakness in the labor market.
This situation has led Wall Street to predict that the Fed will likely hit pause on rate cuts at their January meeting. Central bank officials are reportedly still split on the direction of monetary policy for 2026.
Consumer Sentiment Takes a Hit
On the flip side, consumer confidence reportedly dropped to its lowest level since April due to worries over high prices. Data from Visa shows holiday spending is growing slower year-on-year compared to the same period last year.
Investors are now waiting on weekly jobless claims data due Wednesday morning for more clues on the economy's direction. Just a heads-up, US stock markets will close early on Wednesday and remain fully closed for Christmas.
Reference:
- AP News, S&P 500 closes at another record, beating the high it set earlier this month. Accessed on December 24, 2025
- Featured Image: Shutterstock
Disclaimer
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