Wall Street's Sudden Sell-Off Dampens Holiday Cheer

Wall Street's festive spirit was cut short as a broad-based sell-off on Friday ended the Dow Jones Industrial Average's winning streak. Major indexes fell significantly due to profit-taking and rising U.S. Treasury yields, impacting growth stocks and stalling the anticipated Santa Claus rally.

Wall Street's holiday cheer took a nosedive on Friday, as a significant sell-off hit all three main market benchmarks. Investors witnessed declines even in tech and growth stocks, putting an abrupt halt to a week-long rally driven by these sectors.

Preliminary data showed that the S&P 500 dipped 65.34 points, or 1.08%, closing at 5,972.25. The Nasdaq Composite dropped 294.69 points, equating to a 1.47% loss to rest at 19,725.67, while the Dow Jones Industrial Average plunged 321.73 points, or 0.74%, to conclude at 42,992.58. Michael Reynolds, Glenmede's vice president of investment strategy, attributed the downturn to widespread profit-taking.

This sell-off derailed the seasonal Santa Claus rally, typically seen at the year's end. Rising U.S. Treasury yields played a pivotal role, affecting business expansion costs and impacting tech megacaps, notably the 'Magnificent Seven.' The declining trend raised questions about valuations amidst rising borrowing costs.

(With inputs from agencies.)