Wall Street's Santa Rally At Risk, Palantir Dethrones Nvidia, Consumer Confidence Pulls Back: This Week In The Markets

In a quiet week for economic data, Wall Street’s focus shifted to the possibility of witnessing a "Santa Rally," the seasonal tendency for stocks to rise in the final days of December.

Historically, the S&P 500 has gained 64 times in the past 96 years during the Dec. 24–Dec. 31 window, averaging a 0.85% return.

The market began the week attempting a recover from the Federal Reserve's hawkish signals of fewer rate cuts in 2024. Yet, renewed volatility resurfaced on Friday, casting doubt on the Santa rally's resilience.

Investors remain cautious, as markets weigh Fed policy outlook against uncertainty surrounding the incoming Trump administration's economic plans.

Still, 2024 is shaping up to be a banner year. The S&P 500 is on track to match last year's 24% surge, setting up a two-year gain of 55%, the strongest since 1999. U.S. stocks are also outperforming global markets by the widest margin since 1997, driven by the enduring strength of U.S. economic fundamentals.

On the leaderboards, Palantir Technologies Inc. PLTR has surged 360%, overtaking Nvidia Corp. NVDA, last year's top performer, which gained 175% in 2024.

Consumer Confidence Slips

U.S. consumer confidence, as measured by the Conference Board, declined in December, highlighting rising concerns about economic conditions. A deeper drop in the expectations index, a key forward-looking measure, signals potential weakness in 2025 amid fears of persistent inflation and steady, high interest rates.

Tesla's Robotaxi Bet

Elon Musk envisions a Tesla Inc. TSLA’s robotaxi fleet allowing owners to earn $40,000 annually. Despite the bold prediction, experts question the feasibility of the technology and regulatory challenges, suggesting Musk's vision remains aspirational rather than immediately achievable in the near term.

Trump's Tariff Impact

Goldman Sachs projects the Trump administration will raise tariffs on Chinese imports, averaging a 20% hike, with higher rates for non-consumer goods. This could increase consumer prices by 1%-2%, strain industrial margins, disrupt supply chains and ignite Chinese retaliatory measures, the Wall Street firm says.

Cadillac EV Success

General Motors Co. GM’s Cadillac Lyriq, priced at $60,000, became its best-selling EV in 2024 through the third quarter. The premium EV's success highlights a potential shift toward luxury electric vehicles as automakers target higher margins and affluent buyers.

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