Stock market today: Wall Street indexes drift higher into the close of another

U.S. stock indexes were drifting higher in early trading Tuesday as Wall Street closes out another milestone-shattering year of gains.

The S&P 500 was up 0.2%. The benchmark index is coming off back-to-back declines of more than 1%.

The Dow Jones Industrial Average was up 120 points, or 0.3%, as of 9:56 a.m. Eastern time. The Nasdaq composite was up 0.1%.

More than 85% of the stocks in the S&P 500 were higher. Health care and financial stocks were among the biggest drivers. AbbVie rose 0.7% and JPMorgan Chase was up 0.5%.

Bond yields mostly fell. The yield on the 10-year Treasury slipped to 4.52% from 4.54% late Monday. The yield on the two-year Treasury fell to 4.22% from 4.24%.

Crude oil prices rose 0.5%.

Indexes in Europe mostly rose. Asian markets were mixed, with exchanges in Tokyo and Seoul closed for New Year holidays.

Despite a mini post-Christmas slump, the major U.S. stock indexes are on pace to finish the year with strong gains.

The S&P 500, which set 57 record highs in 2024, is up more than 24% for the year, it’s first back-to-back annual gains of more than 20% since 1998.

The Nasdaq is up 30% and the Dow has gained 13%.

U.S. markets’ stellar run this year has been driven by a growing economy, solid consumer spending and a strong jobs market.

Skyrocketing prices for companies in the artificial-intelligence business, such as Nvidia and Super Micro Computer, helped lift the market to new heights.

Solid corporate earnings growth also helped. Wall Street expects companies in the S&P 500 to report broad earnings growth of more than 9% for the year, according to FactSet. The final figures will be tallied following fourth-quarter reports that start in a few weeks.

Another boost for the market: The economy avoided a recession that many on Wall Street worried was inevitable after the Federal Reserve hiked its main interest rate to a two-decade high in hopes of slowing the economy to beat high inflation.

Receding inflation, which has gotten closer to the Fed’s 2% target, helped energize Wall Street, raising hopes that the central bank would deliver multiple interest rate cuts into next year, which would ease borrowing costs and fuel more economic growth.

Still, after three interest rate cuts in 2024, the Fed has signaled a more cautious approach heading into 2025 with inflation remaining sticky as the country prepares for President-elect Donald Trump to transition into the White House. Trump’s threats to hike tariffs on imported goods have raised anxiety that inflation could be reignited as companies pass along the higher costs from tariffs.

This year’s market rally went beyond stocks. Bitcoin, which was below $17,000 just two years ago, climbed above $100,000 for the first time. And gold also shattered records on its way to a more than 26% gain for the year.

Markets will be closed on Wednesday for the New Year’s Day holiday. On Thursday, investors will get an updated snapshot of U.S. construction spending for the month of November. On Friday, Wall Street will receive an update on manufacturing for December.