It's shaping up to be a much more merry Christmas for Wall Street this year.
The stock market saw a dramatic sell-off last Christmas Eve, with the Dow Jones Industrial Average falling 653 points. The S&P 500 briefly entered into a bear market — typically defined as a drop of more than 20% since recent highs — during the trading day on an intraday basis. Both indexes and the Nasdaq finished down more than 2% for the day.
The Dow and S&P 500 last year posted their worst December since 1931 and their biggest monthly loss since 2009. The turmoil was punctuated by the Federal Reserve's decision to raise interest rates that month and President Donald Trump's aggressive stance toward China in trade negotiations.
The markets snapped back quickly, however, and then kept climbing. The S&P 500 is now up 37% from the bottom of the sell-off.
All 11 main sectors of the S&P 500 are up at least 10% since their closing level last Christmas Eve. Information Technology leads the way, up nearly 58%.
The factors that helped to spook investors last year have reversed themselves as well. The market's banner year has been accompanied by easing monetary policy and hints of progress in trade disputes.
The Federal Reserve has cut its benchmark interest rate three times this year, with the latest cut in October bringing the target range to 1.5% to 1.75%. The United States and China have announced an agreement for phase one of a trade deal, and the U.S. House has passed the new USMCA trade deal involving North American countries.
The list of top stocks since last holiday season have been dominated by semiconductors, with Advanced Micro Devices, Lam Research Corporation and KLA Corp seeing their stock prices more than double in the past year. Target and Chipotle Mexican Grill also had returns of greater than 100%.
Small caps have also had a strong year, with the Russell 2000 rising almost 32%. This was a bigger run than the Dow Jones Industrial Average, which has climbed more than 30.5%.