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In light of the holidays kicking off in earnest this week, Wall Street is faced with a largely uneventful economic calendar and no major scheduled corporate earnings. Wednesday, Christmas Day, will be a market holiday, while the day before Christmas will see a truncated trading session.
Still, market participants will be on the lookout to see whether a Santa rally materializes this year. This stock market phenomenon occurs when equities gain on the last five trading days of December and the first two trading days of January.
The Federal Reserve this week delivered a reality check in the form of higher inflation projections and a slower pace of interest rate cuts. The hawkish messaging sent Wall Street to its worst week in just over a month.
The question now is whether the U.S. stock market will be able to surge in the homestretch or slide, though it is still shaping up to be a strong 2024 for the benchmark S&P 500 index (SP500) with gains of more than 24%.