Tech Leads Holiday Market Gains Amid Mixed Economic Signals

Markets began the holiday week on a high note, driven by strong performances in the tech sector and key economic data releases. Big Tech stocks lifted the Nasdaq and S&P 500, while global markets reflected cautious optimism amid rising Treasury yields and a strengthening dollar. Despite gains, investor sentiment was tempered by weakening consumer confidence and signs of economic challenges ahead, including a drop in durable goods orders. As bullish momentum persists in the Nasdaq 100 and housing markets show resilience, traders remain focused on navigating the mixed signals of growth, inflation, and policy outlooks for 2025.

Big Tech stocks boosted the Nasdaq and S&P 500 on Monday, with the tech-heavy Nasdaq gaining 1% and the S&P 500 rising 0.7%, led by Nvidia, Broadcom, Alphabet, and Meta. Despite thin trading volumes typical of Christmas week, market sentiment remained positive. The Dow Jones edged above the flat line but underperformed its peers.

Earlier in the day, stocks briefly faltered as consumer confidence unexpectedly declined for the first time in three months, raising concerns about the economic outlook. Treasury yields climbed, and the dollar strengthened, reflecting broader uncertainty.

Analysts are optimistic about a potential “Santa Claus Rally,” which has historically been a positive indicator for the S&P 500’s annual performance. However, concerns about a deeper market correction early in 2025 persist.

Global stocks advanced on Monday, driven by gains in Wall Street’s tech sector, while U.S. Treasury yields climbed to a seven-month high and the dollar strengthened. The Nasdaq and S&P 500 were bolstered by rallies in megacap stocks like Nvidia and Broadcom, although concerns about weakening consumer confidence weighed on broader sentiment.

U.S. consumer confidence fell unexpectedly in December, and durable goods orders dropped, raising questions about economic resilience. Meanwhile, Treasury yields rose sharply as the market adjusted to expectations of fewer Federal Reserve rate cuts in 2025. The 10-year yield reached 4.59%, its highest since May.

In currencies, the dollar gained against major peers, while oil and gold prices dipped amid thin holiday trading. Investors remained cautious ahead of the shortened trading week and lingering uncertainties about the economic and policy outlook.

According to the U.S. Census Bureau, new orders for manufactured durable goods declined by $3.0 billion, or 1.1%, in November to a seasonally adjusted total of $285.1 billion, marking the third decrease in the last four months. This follows a 0.8% increase in October. Core durable goods orders, excluding transportation, saw a marginal decline of 0.1%, while orders excluding defense decreased by 0.3%. The primary driver of November’s downturn was a $2.9 billion, or 2.9%, drop in transportation equipment orders, which have also declined in three of the past four months, settling at $95.5 billion.

In November 2024, new single-family home sales reached a seasonally adjusted annual rate of 664,000 units, reflecting a 5.9% increase from October’s revised figure of 627,000 and an 8.7% rise compared to November 2023. The median sales price stood at $402,600, while the average price was $484,800, indicating continued resilience in housing prices despite broader economic uncertainties.

Inventory levels at the end of November were estimated at 490,000 units, representing an 8.9-month supply at the current sales pace. This figure underscores a relatively high supply, signaling potential pressure on price growth if demand slows. The data suggests sustained momentum in the residential housing market, with year-over-year growth despite challenges such as elevated borrowing costs.

Since rejecting the 17,241.68 low on August 5, the NASDAQ 100 Index has sustained a robust upward trend, successfully breaking through key resistance levels. The initial bullish reversal was signaled by a Hammer candlestick pattern, which set the stage for the subsequent rally. This sentiment was further reinforced by the emergence of a “Golden Cross,” where the 20-period Exponential Moving Average (EMA) crossed above the 50-period EMA, confirming the bullish outlook and accelerating upward momentum.

A failure swing pattern, marked by the trough at 18,304.21 remaining above its predecessor and the subsequent breach of the 19,443.77 resistance level, validated the sustained upward trajectory. Technical indicators align with this positive outlook: the price remains above both the 20- and 50-period EMAs, the Momentum Oscillator remains above the neutral 100 level, and the Relative Strength Index (RSI) holds steady above the 50 threshold, all pointing to continued upside potential.

If the bullish momentum endures, traders should focus on resistance levels at 21,836.90, 22,186.30, and 22,844.13. Conversely, key support levels to watch include 21,417.88, 20,760.05, and 19,883.56, which could come into play if the trend weakens.

As markets navigate the final trading days of the year, the outlook remains mixed. Strength in Big Tech and resilient housing data reflect optimism, while weaker consumer confidence and declining durable goods orders highlight lingering economic challenges. With Treasury yields climbing and the Federal Reserve signaling a less dovish policy stance for 2025, investors remain cautiously positioned, balancing opportunities in bullish trends against the risk of broader market corrections in the new year.