Behind the five consecutive gains of US stocks during Christmas week: the attractiveness of stocks with ten-year high dividend yields becomes prominent, and economic resilience supports new highs

As the Christmas holiday approaches, the US stock market has experienced a strong rally. On Wednesday’s close, the S&P 500 and Dow Jones Industrial Average both hit record highs, rising by 0.32% and 0.6% respectively, while the Nasdaq also gained 0.22%. This marks the fifth consecutive trading day of gains, demonstrating strong momentum heading into the end of the year.

Economic Data Surpasses Expectations, Corporate Earnings Outlook Improves

The core driver behind the US stock rally comes from positive economic signals. The US Q3 real GDP grew significantly by 4.3%, the fastest pace in nearly two years, far exceeding market expectations. This data fully reflects the resilience of the US economy and provides solid support for corporate earnings next year.

Meanwhile, initial jobless claims unexpectedly fell to 214,000, below the forecast of 223,500. Although the labor market remains in a “no hiring, no firing” mode, the improvement in unemployment data has boosted market sentiment. However, it is worth noting that the continuing claims increased by 38,000 to 1.923 million, indicating lingering concerns in the labor market.

Ten-Year High-Yield Stocks Reclaim Attention

In the current interest rate environment, high-yield stocks with ten-year records are increasingly attractive. The US 10-year benchmark Treasury yield fell from 4.16% to 4.13%, a decline of 3 basis points. As market expectations for the Federal Reserve to cut interest rates next year adjust, the appeal of high-yield assets re-emerges. According to CME FedWatch, the market still expects the Fed to implement two 25 basis point rate cuts in 2025.

Tech Stocks Lead Gains, Semiconductors Strong

The technology sector performed notably well. Micron Technology rose by 3.77%, with an annual increase of over 241%; Western Digital gained 300% year-to-date; SanDisk increased by 2.12%. The strong performance of these memory and storage chip companies reflects the continued hot demand driven by the AI industry.

Global Markets Diverge, European Stocks Retreat

European markets showed weakness. The UK FTSE 100 declined by 0.19%, and France’s CAC 40 fell slightly by 0.01%. Germany and Italy are closed for holidays. In commodities, gold dropped by 0.13% to $4,479.4 per ounce; WTI crude oil fell by 0.12% to $58.4 per barrel; the US dollar index rose slightly by 0.07% to 97.95.

Cryptocurrency Performance Diverges

Bitcoin increased by 0.14 over the past 24 hours, currently trading at $91.36, up from $87,544 last week, a gain of 1.78%. Ethereum declined by 0.57% in the past 24 hours, trading at $2,945.7. Overall, the crypto market remains relatively stable, with participants largely awaiting the Federal Reserve’s policy moves.

Policy and Outlook

Morgan Stanley analysts note that companies have begun raising prices to cope with tariff pressures and plan to further increase prices in 2026. BlackRock warns that the Fed’s room for rate cuts in 2026 is quite limited, expected to be only two 25 basis point adjustments unless there is a sharp deterioration in the labor market.

Overall, the five-day rally in US stocks reflects market confidence in economic resilience. Meanwhile, the renewed interest in high-yield stocks suggests investors are increasingly focused on income-generating assets. However, risks such as government shutdowns and tariff impacts could still lead to revisions in upcoming data, so investors should closely monitor policy developments.