US stocks rebound on Tuesday is an ‘almost’ sign of the upcoming Rally for Santa Claus

US benchmarks rose on Tuesday as stocks struggled to hold on to gains ahead of the Christmas holiday. But experts say the minor recovery isn’t ‘almost’ a sign that a Santa Rally is on the way.

The Santa Rally takes place when stocks rise during the last five trading days of December and the first two days of the new year.

At mid-session, the Dow Jones Industrial Average rose roughly 120 points, or 0.37%, while the S&P 500 and Nasdaq Composite were 0.25% and 0.23% higher, respectively.

The trader works on the trading floor of the New York Stock Exchange (NYSE) in New York City on December 14, 2022. (Reuters/Andrew Kelly/Reuters Photos)

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“US stocks are trying to break through a four-day streak of losses, but the recovery is not a sign that Santa is coming to town,” Edward Moya, senior market analyst at OANDA in New York, told FOX Business on Tuesday.

“The Bank of Japan was the last key central bank domino to fall, and that’s raising yields, which will make it harder for investors to return to equities given the economy is clearly tied to recession.”

The central bank decided to widen the yield curve of the 10-year Japanese Government Bond. Extended the range to 50 basis points either side of the 0% target; this is a change from the previous cap of 25 basis points.

Federal Reserve

The photo taken on April 20, 2022 shows the US Federal Reserve in Washington DC, USA. (Liu Jie/Xinhua via Getty Images) / Getty Images)

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Last week, the US Federal Reserve adhered to its rate hike strategy and raised interest rates by 50 basis points to calm inflationary pressures not seen in more than four decades. The Fed’s policy is expected to plunge the US economy into recession.

Consumer prices continued to rise during the busiest shopping season of the year, while retail stocks such as Nike, Macy’s, Abercrombie and Best Buy fell the hardest on Tuesday in negative territory and about 0.88% below the Best Buy red line.

Scrolling text Security Last Change Change %
BBY BEST BUY CO. 79.80 +0.32 +0.40%

Meanwhile, travel stocks rose mostly on Tuesday as holiday travel increased with shares of Southwest, United and Delta Air Lines flying above the red line on Tuesday and only American Airlines was down 0.16% to trade in negative territory.

Scrolling text Security Last Change Change %
AAL AMERICAN AIRLINES GROUP INC. 12.48 -0.33 -2.58%

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