The S&P 500 closed at a fresh record high of 6,090.27 on Friday, December 6, 2024, capping off its third straight winning week as investors digested a November jobs report that came in strong enough to support economic growth but not so hot as to deter the Federal Reserve from cutting interest rates later this month. The broad market index rose 0.25%, while the tech-heavy Nasdaq Composite advanced 0.81% to 19,859.77, also notching a new all-time high. The Dow Jones Industrial Average bucked the trend, slipping 123.19 points, or 0.28%, to close at 44,642.52.
The market's record-setting performance came after the Labor Department reported that nonfarm payrolls increased by 227,000 jobs in November, beating the Dow Jones estimate of 214,000 and marking a significant rebound from October's upwardly revised gain of 36,000. The unemployment rate nudged up to 4.2%, as expected. Following the "not-too-hot, not-too-cold" employment data, fed funds futures trading reflected an 85% likelihood of another rate cut at the Fed's December 17-18 meeting, according to the CME Group's FedWatch Tool.
How the S&P 500's Record Run Unfolded
The S&P 500's path to Friday's record close was anything but linear. The week began with the index retreating from its previous high on Thursday, December 5, as investors grew cautious ahead of the jobs report. That session saw the Dow drop more than 200 points while the S&P 500 slipped 0.19% to 6,075.11. "The problem you have is that valuations are stretched across the board," said Keeley Teton portfolio manager Brian Leonard in an interview with CNBC. "You're sitting at records, but there's not a lot of enthusiasm or euphoria. Historically, when the records happened, the valuations were more reasonable."
Just days earlier, on December 4, all three major indexes had scored record closing highs boosted by a technology rally and comments from Fed Chair Jerome Powell that gave investors confidence about the economic outlook. The S&P 500 gained 0.60% to 6,086.47 that day, while the Nasdaq jumped 1.30% to 19,735.12. Powell had said at a New York Times event that "the economy is stronger than it appeared in September when the central bank began cutting interest rates, allowing policymakers to potentially be a little more cautious in reducing rates further."
The week's trading activity continued a pattern that began on December 2, when the S&P 500 and Nasdaq Composite notched new records while the Dow slipped. Big Tech stocks led the market that day, with the Nasdaq gaining 1% and the S&P 500 rising 0.2% even though most stocks in the index were actually down. The yield on the 2-year Treasury note rose to 4.197%, slightly higher than the 10-year yield at 4.193%, representing the latest inversion of the so-called yield curve that signals uncertainty about interest rates and the economy.
Timeline: Key Market Moments from December 2-6
The S&P 500's record-setting week unfolded through a series of key events that highlight the delicate balance markets are navigating between economic data, Fed policy, and sector rotations:
- December 2: S&P 500 and Nasdaq open December with record closes as tech stocks lead, while Dow slips 129 points. Fed Gov. Christopher Waller says he's leaning toward a December rate cut.
- December 4: All three major indexes hit record closing highs after Powell's comments and a tech rally led by Salesforce and Marvell Technology. S&P 500 gains 0.60% to 6,086.47.
- December 5: Markets pull back ahead of jobs report, with Dow dropping 248 points and S&P 500 falling 0.19% to 6,075.11. Bitcoin briefly tops $100,000 for first time.
- December 6: November jobs report shows 227,000 new jobs, above expectations. S&P 500 rises 0.25% to record close of 6,090.27, Nasdaq gains 0.81% to 19,859.77.
- Throughout the week: Fed funds futures probability of December rate cut fluctuates between 62% and 85%, settling at 85% after jobs data.
Why This Market Momentum Matters: Expert Analysis and Impact
The S&P 500's continued ascent to new records despite stretched valuations and economic uncertainty speaks to several underlying market dynamics. According to Luke O'Neill, portfolio manager at Catalyst Funds, the labor market data provided the perfect backdrop for continued Fed support. "You're seeing a labor market that is not weak but is definitely softening, and that is more than anything else what is giving traders more confidence in the 25 basis-point rate cut here at the upcoming meeting," O'Neill told CNBC. "It's not gangbusters, but we're doing reasonably solid from an economic perspective and yet there is enough of a softening on the labor side to give plenty of air cover for the Fed to lower rates."
Sector performance during the week told an important story about where money is flowing. Consumer discretionary stocks led the S&P 500 with a 5% weekly gain, followed by communication services (4.1%) and information technology (3.4%). On the opposite end, energy and utilities sectors lagged with declines of 4.3% and 3.9%, respectively. This divergence highlights how investors are favoring growth-oriented sectors while rotating out of defensive and economically sensitive areas.
Market breadth, however, revealed some underlying weakness. On Friday, only 23 stocks in the S&P 500 reached new 52-week highs, while five hit new lows. Among the notable highs were Meta Platforms, Amazon, Apple, and Tesla, while energy companies like Apache, Devon Energy, and Occidental Petroleum were among the lows. This concentration of gains in mega-cap technology stocks raises questions about the sustainability of the rally if broader participation doesn't improve.
Where Things Stand Now: Latest Market Developments
As of Friday's close, the S&P 500 has risen 27.6% year-to-date, putting it on pace for its second-best annual performance of the 21st century if the rally continues through December, according to Deutsche Bank analysis. The index's strong performance has been driven by a mix of earnings growth and valuation expansion, with technology stocks leading the way.
Fed policy remains the dominant narrative heading into the final weeks of 2024. Cleveland Fed President Beth Hammack said Friday she expects to slow the pace of interest rate cuts ahead. "To balance the need to maintain a modestly restrictive stance for monetary policy with the possibility that policy may not be far from neutral, I believe we are at or near the point where it makes sense to slow the pace of rate reductions," the central bank official said in remarks in her home district.
Meanwhile, investor sentiment indicators show rising bullishness. The American Association of Individual Investors' weekly survey showed bullishness about the outlook for stocks over the next six months leaped to 48.3% in the week ended Wednesday from 37.1% last week, well above the historical average of 37.5%. Bearish views tumbled to 30.7% from 38.6%.
What Happens Next: The Road Ahead for the S&P 500
Looking forward, analysts are generally optimistic about the S&P 500's prospects, though they caution that the path may become more volatile. HSBC said it expects the S&P 500 to hit 6,700 by the end of 2025, which implies more than 10% upside from Thursday's close. "While this year's equity rally was a mix of both earnings growth and a valuation re-rating (50/50), we expect next year's equity returns to be focused on earnings growth as valuations are more stretched," HSBC analyst Nicole Inui told clients in a Friday note. "Overall, we expect earnings to grow by 9% incorporating a slower but still resilient US economy and some margin expansion."
UBS also maintained a constructive stance on global equities heading into 2025. "We note that historically U.S. equities tend to rally into presidential elections and after, with the average gain in the 150 trading days following an election averaging near 5% in data going back to 1928 for the S&P 500," the bank wrote in a Friday report. UBS added that the technology, utilities, and financial sectors look most attractive within U.S. stocks.
Potential headwinds include the Federal Reserve's policy path, tariff threats from the incoming administration, and geopolitical tensions. However, the market has shown remarkable resilience in the face of these challenges throughout 2024. As Peter Cardillo, chief market economist at Spartan Capital Securities, noted after Friday's close, "I think we're in the Santa Claus rally, with a little bit of a bump in the road here today, and it's probably safe to say the year-end rally will continue."
The Bottom Line: Key Points to Remember
- The S&P 500 closed at a record 6,090.27 on December 6, posting its third straight winning week
- November jobs data showed 227,000 new positions, supporting economic growth without derailing Fed rate cut expectations
- Fed funds futures indicate an 85% probability of a December rate cut following the jobs report
- Technology and consumer discretionary sectors led gains, while energy and utilities lagged
- HSBC forecasts the S&P 500 could reach 6,700 by end of 2025, representing over 10% upside potential
- Market breadth remains a concern, with gains concentrated in mega-cap technology stocks
- Investor sentiment has turned increasingly bullish, with AAII survey showing 48.3% bullishness versus historical average of 37.5%
As investors look ahead to the Federal Reserve's December meeting and the final trading weeks of 2024, the S&P 500's record run demonstrates both the resilience of the U.S. economy and the ongoing confidence in corporate earnings growth. While valuations have stretched and concentration risks have increased, the combination of supportive Fed policy, solid economic data, and continued technology leadership suggests the bull market may still have room to run.
