Market closes early, Santa rally period begins, Richmond Fed data: 3 things to watch for on Tuesday

Here are the most important things to know about Tuesday before you hit the door.

We’ll get a short trading day on Christmas Eve with the stock market closing at 1 p.m. ET and bond market closing at 2 p.m. ET.

Investors are expecting to have a very different Christmas Eve than the last one that saw the S&P 500 dip into bear market territory. On Dec. 24, 2018, the Dow Jones Industrial Average lost about 650 points in its worst day of Christmas Eve trading ever amid turmoil in Washington. President Donald Trump teased about firing Federal Reserve Chair Jerome Powell after the central bank hiked interest rate in December, triggering a massive sell-off.

Tuesday will be the first day of the Santa Claus rally period, which happens on the final five trading days of the year and the first two tradings days of the new year.

The S&P 500 has posted a 1.3% gain on average since 1950 during those periods, according to the Stock Trader’s Almanac. The market also posted strong performance over the last 10 years, down only two times.

The S&P 500 hit another record on Monday, up nearly 29% and on pace to post its best year since 2013. If the benchmark ends the year up 31%, it will score the best annual performance since 1997.

Federal Reserve Bank of Richmond will release its monthly Business Activity Survey on Tuesday. The survey shows the state of manufacturing activities including shipments, new orders and employment in the sector.

The manufacturing sector softened in November, weighed down by negative readings for shipments and new orders, the survey showed last month. Manufacturing firms also reported a drop in backlog of orders, but they were optimistic that conditions would improve in the coming months, Richmond Fed said in its last survey.

Major events: (All times ET)

10:00 a.m. Richmond Fed Business Activity Survey

1:00 p.m. Stock market closes

2.00 p.m. Bond market closes