Wall Street’s main indexes hovered near their all-time highs in light post-Christmas trading on Friday, as investors bet that more interest rate cuts and strong corporate earnings would propel markets to fresh peaks next year.

The benchmark S&P 500 hit an intraday record high, veering close to the 7,000-point mark, while the blue-chip Dow Jones Industrial Average was about 0.3% from its December 12 peak.

U.S. stocks have climbed in recent days after months of intermittent selloff as AI-related companies faced pressure amid concerns over soaring valuations and high capital expenditures denting profits.

However, signs of economic resilience, the prospect of a dovish pivot under a new Federal Reserve chair next year and renewed appetite for AI stocks have fueled a market recovery, putting the S&P 500, Dow and Nasdaq on course for a third straight year of gains.

“2026 is likely going to be a ‘prove-it’ year for markets. Companies must deliver tangible productivity and margin gains from AI and other investments,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.

The S&P 500 has risen more than 17% so far in 2025, driven by megacap tech companies for much of the year, but the rally has broadened of late, with investors piling into cyclical sectors such as financials and materials.

Traders are waiting to see if the “Santa Claus rally” — a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac — can happen this time. That period began on Wednesday and will run through January 5.

Main Markets Slightly Rise

At 09:39 a.m. ET, the Dow Jones Industrial Average rose 10.77 points, or 0.02%, to 48,741.93. The S&P 500 gained 9.97 points, or 0.14%, to 6,942.02, and the Nasdaq Composite advanced 42.38 points, or 0.17%, to 23,655.69.

Six of the 11 S&P sectors gained, led by information technology, while utilities and industrials were the laggards.

Nvidia shares climbed 1.5% after the AI chip designer agreed to license chip technology from startup Groq and hire its CEO.

Biohaven dropped 1.4% after its experimental depression drug did not meet the main goal of a mid-stage trial, adding to a string of setbacks for the company this year.

Coupang rose 8.6% after the online retailer said all the customer information leaked from the South Korean company has been deleted by the suspect.

U.S.-listed shares of precious metal miners such as First Majestic, Coeur Mining and Endeavour Silver rose between 1.8% and 3.3%, as silver and gold prices smashed fresh records again. [GOL/]

Advancing issues outnumbered decliners by a 1.11-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.34-to-1 ratio on the Nasdaq.

The S&P 500 posted 13 new 52-week highs and no new lows, while the Nasdaq Composite recorded 18 new highs and 52 new lows.

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(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)