According to Bloomberg Business, US stocks advanced toward a fresh record high in thin holiday trading on December 27th. The S&P 500 and Nasdaq 100 were both up 0.2% by 9:40 a.m. in New York, with the S&P 500 up nearly 18% year-to-date. Nvidia Corp. climbed as analysts viewed a licensing deal with AI startup Groq positively. Meanwhile, precious metals surged to all-time highs, with spot gold peaking above $4,530 an ounce. Shares of Coupang Inc. rose 11% after it identified a former employee accused of accessing data of 33 million customers.
Santa and AI Keep the Party Going
Here’s the thing: the market is running on a mix of seasonal cheer and pure momentum. The so-called “Santa Claus Rally” is a powerful psychological catalyst, and traders are happy to ride it. But look closer, and the drivers are getting a bit thin. Nvidia getting a bump from a licensing deal? That’s the AI narrative on autopilot. It’s not a new blockbuster product; it’s a sign that the market will cling to any positive AI news. And with the Fed mostly on pause, there’s not much else to focus on except hoping the good times roll into January.
The Real Test Is Coming
But the most interesting part of this report is the quiet shift in timeline. For months, the talk was all about 2024 earnings. Now, analysts like Brian Jacobsen are already talking about 2026 as the “prove-it year.” That’s a huge tell. It basically admits that current valuations, especially in tech, have sprinted way ahead of near-term reality. The bet is that companies will eventually grow into these prices. But what happens if, in two years, those tangible productivity gains from AI aren’t as big as promised? That’s the lurking risk everyone is starting to whisper about.
Gold and Oil Tell a Different Story
While stocks party, the action in commodities hints at a more anxious undercurrent. Gold hitting a record isn’t just a random rally. It’s a direct response to geopolitical tension and a softer dollar—classic fear and hedging trades. The same goes for oil ticking up on supply risks from Venezuela and Nigeria. These markets are reacting to real-world disruptions, while equities are buoyed by optimism and technical patterns. It’s a weird disconnect. You have to wonder which narrative will win out after the holidays.
A Sloppy End to the Year
And let’s not ignore the other news buried in the report. A data breach affecting 33 million Coupang customers is massive, yet the stock went up? That seems perverse, but the market is rewarding them for “containing” the issue. A failed drug trial for Biohaven sends that stock down—that’s the normal, brutal reaction. It’s a messy, low-volume trading period where weird things happen. Hundreds of flights are canceled in a snowstorm, and the market just shrugs. Everything feels a bit suspended, waiting for the new year to bring fresh direction. The real question is whether the Santa Rally is delivering presents or just borrowing optimism from 2025.
