NEW YORK: Wall Street’s main indexes rose on Tuesday in a truncated trading session before Christmas, with the S&P 500 and the Nasdaq up for the third consecutive day, helped by gains in a handful of megacap and growth stocks. Broadcom and Nvidia provided the biggest boost to the indexes, advancing 2.7 percent and 0.7 percent, respectively, while Consumer Discretionary and Technology led gains among S&P 500 sectors.

Global stocks mostly pushed higher on Tuesday in thin Christmas Eve trade as investors waited to see if a so-called Santa Claus rally would sweep the market. “Santa Claus comes tonight, but if stock market participants are lucky he will start sprinkling some gifts today, which marks the official start to the ‘Santa Claus Rally’ period,” said Briefing.com analyst Patrick O’Hare.

With few major catalysts, thin trading volumes expected in the final days of the year raised the prospect of choppy trading. Stock markets will at 1 pm ET on Tuesday and will be closed for Christmas on Wednesday. At 09.42 am the Dow Jones Industrial Average rose 32.38 points, or 0.08 percent, to 42,939.33, the S&P 500 gained 21.68 points, or 0.36 percent, to 5,995.75, and the Nasdaq Composite gained 116.55 points, or 0.59 percent, to 19,881.43.

“Investors are breathing a sigh of relief that maybe the hawkish rate cut last week combined with the softer PCE reading indicate that inflation is not that big of a re-emerging threat,” said Sam Stovall, chief investment strategist of CFRA Research.

“As a result, maybe this market will end up creeping higher between now and the end of the year.”

After a stellar run to record highs following the November election, which sparked hopes of pro-business policies under US President-elect Donald Trump, Wall Street’s rally hit a bump this month as investors grappled with the prospect of higher interest rates in 2025. The US Federal Reserve eased borrowing costs for the third time this year last Wednesday, but signaled only two more 25-basis-point reductions next year, down from its September projection of four cuts, as policymakers weigh the possibility of Trump’s policies stoking inflation. Traders expect the Fed to leave rates in the range of 4 percent to 4.25 percent by the end of 2025, from between 3.75 percent and 4 percent about 10 days ago, according to CME’s FedWatch tool.

US stock markets have traditionally fared well in the last five trading days of the year and the first two in the new year, with experts advancing a number of possible reasons as the festive holiday mood and purchasing ahead of the end of the tax year.

“It looks like Santa Claus’s sleigh will be a little slow getting off the ground, but he would be the first to tell you that it isn’t how he starts, it’s how he finishes,” added O’Hare. There was little news to push trading in the half-day trading session in New York.

Shares in American Airlines fell more than two percent as trading got away after a technical issue forced the world’s largest carrier to ground all its US flights for an hour during the busy year-end travel period. The airline and the Federal Aviation Administration have yet to describe the nature of the technical issue. In Europe, Paris’s CAC 40 closed higher in a pre-holiday short session while Frankfurt was closed all day.

London also closed in the green, despite a week clouded by lacklustre economic data that is “stoking concerns about the UK’s slowing momentum heading into the new year,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Hong Kong and Shanghai stock markets closed up over one percent, as China announced fresh fiscal measures to boost its ailing economy. 

On Tuesday, state media reported that China will raise its deficit in order to boost spending next year, as the world’s second-largest economy battles sluggish domestic consumption, a property crisis and soaring government debt. In company news, Honda shares closed more than 12 percent higher after the Japanese auto giant announced a buyback of up to 1.1 trillion yen ($7 billion), as it enters merger talks with struggling rival Nissan.

The talks on collaboration between Honda and Nissan would create the world’s third-largest automaker, expanding development of EVs and self-driving tech. Honda’s CEO insisted it was not a bailout for Nissan, which announced thousands of job cuts last month and reported a 93 percent plunge in first-half net profit. — Agencies