Closing Recap 

U.S. stocks climbed on Tuesday, with the S&P 500 rising for a fourth consecutive day as investors cheered a much stronger-than-expected Q3 GDP report. The data showed the U.S. economy grew at a blistering 4.3% annualized rate, blowing past forecasts and providing a strong fundamental underpinning for the market’s recent rally. The major indices advanced in a low-volume session, with the S&P 500 now closing in on its all-time intraday high. The U.S. dollar and Treasury yields also rose on the hot GDP print, causing a broad pullback in foreign currencies. Precious metals were the standout performers, with both gold and silver continuing their record-breaking ascent. The crypto market, however, remained under pressure, with Bitcoin struggling to hold the $88,000 level ahead of a massive options expiry. 

Key Takeaways 

• Hot GDP Boosts Stocks: U.S. stocks rallied after advance Q3 GDP showed the economy grew at a much stronger-than-expected 4.3% annualized rate, the best quarter since Q3 2023. 
• S&P 500 Nears All-Time High: The S&P 500 has now risen for four straight days and is just points away from its all-time intraday high as the “Santa Claus Rally” period officially begins. 
• The “Santa Claus Rally” is Underway: The market has officially entered the historically strong “Santa Claus Rally” period. With powerful seasonal tailwinds now in play, the path of least resistance is higher for stocks as the year comes to a close.
• Gold and Silver Hit New All-Time Highs Again: Precious metals continued their spectacular run, with gold settling above $4,500 an ounce and silver surging past $72 for the first time in history. 
• Dollar Plummets to 3-Month Low: The U.S. Dollar is in a clear downtrend, with the DXY index falling to a three-month low as the combination of Fed easing expectations and a flight to hard assets weighs heavily.
• Yen Soars as Intervention Talk Intensifies: The Japanese Yen is the standout performer in G10 FX, rallying strongly after Japanese officials escalated their verbal intervention, with the Finance Minister now signaling a “free hand” to act against speculative moves.
• Bitcoin Pressured by Massive Options Expiry: Bitcoin is struggling for momentum, weighed down by continued ETF outflows and the looming expiration of a record $28.5 billion in options on Friday. 
• Fed’s Balance Sheet Expansion in Focus: After a $2.4 trillion reduction, the Fed has ended its QT program and is now expanding its balance sheet again, a significant but under-the-radar tailwind for markets. 
• Oil Bounces: WTI Crude Oil is bouncing over 2.6% on geopolitical supply risks.
• Geopolitical Watch: The market is monitoring a warning from President Trump that anyone who disagrees with him will “never” be Fed Chair, adding a layer of political uncertainty to the policy outlook. 

Market Overview

Wall Street continued its quiet but firm grind higher on Tuesday, with the S&P 500 and Dow Jones Industrial Average both pushing to new record closing highs. The bulls are firmly in charge as the market heads into the Christmas holiday. Tuesday’s trading session saw another day of gains for U.S. stocks, driven by a blockbuster Q3 GDP report that showcased the remarkable resilience of the U.S. economy. The 4.3% growth figure was well above expectations and provided a strong fundamental justification for the market’s recent run to all-time highs. This “good news is good news” dynamic is a clear sign of a confident market, one that is shrugging off concerns about a potential slowdown and embracing the prospect of a soft landing. This bullish sentiment is being further fueled by the historical tailwind of the “Santa Claus Rally,” a seven-day period that has seen the S&P 500 rise 77% of the time. 

Index	Up/Down	%	Last
DJ Industrials	79.73	0.0016	48442
S&P 500	31.29	0.0045	6910
Nasdaq	133.01	0.0057	23562
Russell 2000	-12.76	-0.005	2546

With the Federal Reserve having recently cut rates and now actively expanding its balance sheet again, the liquidity backdrop is also highly supportive. While other data points like durable goods orders were weaker, the market chose to focus on the headline growth number. The main question now is whether this momentum can carry the S&P 500 to a new all-time intraday high before the year is out. With the VIX fear index at 52-week lows, the path of least resistance appears to be higher.

Economic Calendar 

With U.S. markets closing early for Christmas Eve, today’s session is expected to be quiet. The focus will be on the final economic data release before the holiday. Data Released Yesterday / Overnight: 

• U.S. Q3 GDP (Advance): A major upside surprise, with the economy growing at a 4.3% annualized rate (vs. 3.3% exp). However, the GDP Price Deflator also came in hotter than expected at +3.7%. 
• U.S. Durable Goods Orders (Oct): Fell a weaker-than-expected -2.2% m/m. 
• U.S. Consumer Confidence (Dec): Dropped to 89.1, missing the 91.0 forecast and signaling a decline in household sentiment. 

Today is Christmas Eve, and market activity will be extremely light with shortened sessions in the U.S. Today’s Economic Calendar: 

• U.S. Markets Close Early at 1:00 PM ET for Christmas Eve. 
• U.S. Session: The key release is the weekly U.S. Jobless Claims report. 
• U.S. Stock Markets Close Early at 1:00 PM ET (18:00 GMT). 
• U.S. Bond Markets Close Early at 2:00 PM ET (19:00 GMT). 
• 13:30 GMT – U.S. Weekly Jobless Claims.

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

The big story is the explosive, ongoing rally in precious metals. Precious metals are stealing the show, with both gold and silver continuing their record-breaking ascent. February gold settled up 0.8% at a new all-time high of $4,505.70 an ounce, while silver also surged to a new record of $72.69. The rally is being fueled by a powerful combination of dovish Fed bets, safe-haven demand, and a weaker long-term dollar outlook. Crude oil prices also found a bid, with WTI rallying on rising geopolitical tensions with Venezuela.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.37	0.0064	58.38
Gold	36.3	0.0081	4505.7
EUR/USD	0.0031	0.0026	1.1794
USD/JPY	-0.716	-0.0046	156.287
Bitcoin	-500	-0.006	87500
10-Year Note Yield	0.002	0.0005	0.04173

The U.S. dollar rebounded on the back of the strong GDP data, causing a broad pullback in G10 currencies. 

• EUR/USD: The pair is pulling back from a three-month high, trading around 1.1790 after a three-day winning streak. The euro’s rally is facing a test as the stronger U.S. growth data provides a tailwind for the dollar. The pair is a prime beneficiary of the weak dollar narrative and is entering a historically bullish period.
• GBP/USD: The pound is holding firm above the big psychological 1.3500 level, hitting a three-month high. The currency is benefiting from expectations of a more gradual easing path from the Bank of England compared to the Fed. 
• USD/JPY: The yen is continuing its recovery, with the pair trading near 156.00. The JPY is being supported by hawkish expectations for the Bank of Japan and a broader flight to safety. The Yen also rallies on a significant escalation in verbal intervention from Japanese officials, who are now signaling a “free hand” to act against “speculative” moves.

Cryptocurrencies: The crypto market remains under pressure. Bitcoin is struggling to hold the $88,000 level, weighed down by continued outflows from U.S. spot ETFs and the looming expiration of a record $28.5 billion in options on Friday. This massive expiry is likely to keep volatility elevated into the year’s end. 

U.S. Treasury yields climbed after the hot GDP report. The benchmark 10-year yield rose, reflecting the market’s reassessment of the U.S. economic outlook. A 5-year note auction saw solid demand. 

Looking Ahead 

Today’s trading will be dominated by the weekly U.S. Jobless Claims report, the last piece of major data before the Christmas holiday. With U.S. markets closing early today and closed tomorrow, liquidity will be extremely thin. Any unexpected headlines could spark outsized moves in a quiet market. The main focus for investors will be on whether the S&P 500 can take out its all-time intraday high and officially kick off the “Santa Claus Rally.”

What to Watch

• The “Santa Claus Rally”: The market has now officially entered the historically strong “Santa Claus Rally” period. With powerful seasonal tailwinds now in play, the path of least resistance is higher for stocks, but the thin holiday liquidity can lead to exaggerated moves. 
• The Fed Chair Announcement Looms: The report that President Trump could name the next Fed Chair as early as the first week of January is a major catalyst. The market will be on high alert for any leaks or official announcements, as the choice will have significant implications for monetary policy. 
• The Yen’s Intervention Risk: The verbal intervention from Japanese officials has clearly escalated. With the market on high alert for physical intervention, any sharp, disorderly moves in the Yen could be met with a swift and powerful response, especially in thin holiday markets. 
• The Precious Metals Parabola: The moves in Gold and Silver are historic but are also becoming extremely extended. While the underlying fundamentals are strong, the risk of a sharp, violent pullback on profit-taking is very high. 
• Bitcoin’s Massive Options Expiry: The record-breaking $28.5 billion options expiry this Friday is a huge event for the crypto market. It could either remove a major source of overhead pressure or trigger a new wave of volatility.