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The tech-heavy index ended 1% higher, while the S&P 500 gained 0.7% led by gains in Nvidia, Broadcom, Alphabet and Meta.
The Dow Jones ended above the flat line but underperformed its peers.
US markets will shut early on Tuesday due to Christmas Eve and will remain shut on Wednesday due to Christmas.
Treasury 10-year yields advanced six basis points to 4.59%. The Bloomberg Dollar Spot Index rose 0.3%.
Earlier on Monday, stocks lost steam momentarily after data showed consumer confidence unexpectedly sank for the first time in three months on concerns about the outlook for the economy.
“The economic outlook is deteriorating,” said Neil Dutta at Renaissance Macro Research. “This was true before the Fed’s December confab and remains true. The risk of the Fed flip-flopping is quite high.”
The S&P 500 is on its way to record a stellar annual return and back-to-back years of more than 20% gains. The index has risen about 25% since the end of 2023, with the top seven biggest technology stocks accounting for more than half of the advance.
“Last week’s action should mark the end of the recent pullback and allow a ‘Santa Claus Rally’,” said Jonathan Krinsky at BTIG. “We do think a deeper correction early in ’25 is likely, albeit from a new all-time high.”
Whether or not the gauge will be able to stage a “Santa Claus Rally,” that continues to be a barometer of investors’ optimism into the new year. That seven-day period includes the last five trading days of the old year and the first two of the new one.
A positive “Santa Claus Rally” has preceded a 10.4% average annual gain for the S&P 500 since World War II, as well as a 74% frequency of advance, according to Sam Stovall at CFRA. However, a decline in this seven-day period saw the gauge post an average annual increase of only 5.7%, posting a gain just 32% of the time.
To Morgan Stanley’s Michael Wilson, negative breadth — when falling shares outnumber those that are rising — may not matter as much for high-quality stock indexes with robust price momentum.
(With Inputs From Agencies.)
