Why the S&P 500 Holds Near Record Highs Despite Weak Jobs, Tariff Fears, and Holiday Price Scrutiny

The S&P 500 traded around 6,831 on Wednesday (Washington Post), close to its all-time high after rebounding from November lows. This strength comes even as private payrolls fell 32,000—far below expectations for a 40,000 gain—per the ADP report cited by Trading News. Markets priced in an 89% chance of a Fed rate cut in December (Investing.com), helping offset the jobs miss. Tariff threats under the incoming Trump administration also loom, with the Indian rupee hitting a record low above ₹90 per USD due to 50% U.S. import tariffs and capital outflows, as noted in the same report.

Sector Rotation Away from Tech Drives the Rally

Non-tech stocks led the charge. Bloomberg reports Eli Lilly & Co., Cardinal Health Inc., and Biogen Inc. rank among the top 10 S&P 500 performers since Oct. 28, the last record close. Microchip Technology led daily gains with a 12.2% surge on strong guidance (Investopedia). Tech lagged, with the S&P 500 Information Technology index down 4.2% over that stretch; Nvidia Corp. and Microsoft Corp. posted bigger drops.

Investing.com details how the index erased most of a nearly 5% November drop to end the month up 0.1%. Buying spread broadly last week, pushing 60% of S&P 500 stocks above their 200-day moving average (up from a low 50% mid-November). Rotation shifted to defensive sectors, breaking the cyclical-to-defensive ratio’s uptrend for the first time since May.

Consumer Spending and Rate Cut Hopes Counter Headwinds

Holiday shopping held firm. The National Retail Federation counted 202.9 million shoppers over Black Friday and Cyber Monday, per Investing.com. In-store traffic rose 3% year-over-year; online jumped 9%. Visa said nearly half of U.S. shoppers used AI tools for deals, signaling price sensitivity didn’t derail demand.

Weak jobs data fueled rate-cut bets, with 10-year Treasury yields at 4.065% and dollar index at 96.51.
Other supports: strong earnings, AI optimism, and Russia-Ukraine ceasefire hopes repaired technical damage, flipping the Percent Price Oscillator to a buy signal.

December Seasonals Add Lift

History favors December gains. Since 1950, the S&P 500 averaged 1.4% returns, positive 73% of the time, says Investing.com. Strength often builds after the 11th trading day. Trading News notes energy and precious metals rallied too: WTI crude up 1.3% to $59.40/barrel on peace talks, silver at a record $58.97/oz.

Retail investors stayed sidelined per VandaX data, and resistance lingers at November highs of 6,851–6,870. Still, the bull case persists on these fundamentals amid the noise.