US equities are rising at the start of the shortened session

Markets close early on Christmas Eve, and the New York and Nasdaq stock exchanges are expected to close at 1:00 p.m. ET. The American and European markets are closed on Friday.

Investors have been focused on a host of issues this week, including the outlook for legislation to combat the coronavirus and signs of a faltering rebound. Increased levels of coronavirus infection and a new variant of Covid-19 emerging in the UK have raised concerns that additional lockdown measures may be in place in the winter months, weighing on market sentiment.

“The market is so competitive at the moment. People are worried about more lockdowns and more travel restrictions, ”said Altaf Kassam, head of investment strategy at State Street Global Advisors in Europe. “This will continue to attract the market.”

Bets that a new fiscal stimulus package would support families and small businesses in the coming days have been questioned after President Trump vetoed a $ 740.5 billion defense policy bill on Wednesday and demanded last-minute changes to the legislation. regarding coronavirus control. His unexpected criticism of the bill has sparked another deadlock between the White House and Capitol Hill. Mr Trump has not yet said whether he will veto the aid package.

Weak recent economic data has boosted investors’ hopes that an agreement on the aid package will be reached. Data released Wednesday showed that household spending fell for the first time in seven months and layoffs remained high as an increase in virus cases weighed on the economic recovery.

“The market certainly expects an aid package to go through,” said Mr Kassam.

In bond markets, the yield on the 10-year Treasury fell to 0.943% from 0.953% Wednesday. Yields fall when bond prices rise.

Overseas, the pan-continental Stoxx Europe 600 rose slightly by 0.2%, with markets in Germany and Italy closed until Monday.

The British pound rose against the dollar and the euro as the UK and the European Union moved closer to a post-Brexit trade deal. Investors have said they would welcome more clarity on trade relations. The UK equity benchmark, the FTSE 100 index, closed up 0.1%, while the FTSE 250, which focuses on small and medium-sized companies, ended the day up 1.2%.

The British pound has rallied in recent days as investors expected a deal to be reached. “The market already had this as a baseline,” said Andreas Steno Larsen, global foreign exchange and fixed income strategist at Nordea Markets. “I don’t think anyone really believed in the cliff-edge scenario.”

The Turkish lira gained nearly 1% against the dollar after Turkey’s central bank raised its benchmark one-week repo rate from 15% to 17%. The currency was one of the worst performers this year, after losing one fifth of its value against the dollar, and investors began to worry that attempts to defend it were unsustainable.

“You can already see that the lira has stabilized,” said Nikolay Markov, a senior economist at Pictet Asset Management. That is “a sign that investor sentiment was better than a month ago, before the first rate hike.”

Most major stock indices in Asia closed higher. South Korean Kospi gained 1.7%, while Japan’s Nikkei 225 gained 0.5%. China’s Shanghai Composite fell 0.6%.

Write to Caitlin Ostroff at [email protected]