• The Russell 2000 index RUT, -0.16% closed 17.22 points, or 0.9%, ending at a record 2,007.10.
• The Dow closed 114.32 points, or 0.4%, to end at 30,129.83.
• The S&P 500 index finished 2.75 points, or 0.1%, higher to close at 3,690.01, snapping a 3-session slide.
• The Nasdaq Composite Index lost 36.80 points, or 0.3%, to close at 12,771.11.

What’s driving the market?

Markets remain fixated on the completion of the coronavirus aid package and government funding legislation that Congress passed on Monday after President Donald Trump expressed his unhappiness with it.

On Wednesday, Trump, who has asked lawmakers to increase direct payments to qualified individuals to $2,000 from $600, also vetoed a $740.5 billion defense-policy bill.

However on Thursday morning, Republicans in the House defied the president and blocked a bill put forward by Democrats that would have sent $2,000 checks to individuals as part of the coronavirus financial aid package.

Thursday trade also begins a period in U.S. equities, known as the Santa Claus rally, that has historically been good for equities, producing an average 1.3% gain over the stretch, according to research from Ryan Detrick at LPL Financial.

The market continues to be haunted though by worries about the spread of the coronavirus, despite a roll out of vaccines. A spike in deaths and hospitalizations from COVID, has taken the shine off reaching what the Centers for Disease Control and Prevention called an “early but important” milestone of more than 1 million people vaccinated. 

Indeed, daily new U.S. cases of Covid-19 rose to 227,522 on Wednesday from 201,674 on Tuesday, according to data provided by the New York Times. The death toll increased to 3,411 from 3,239, to mark the second-worst day since the pandemic began. Hospitalizations grew by 1,702 to a record 119,463 on Wednesday, according to the COVID Tracking Project.

Meanwhile, U.K and EU officials announced a Brexit trade deal on Thursday after months of protracted negotiations, and ending years of uncertainty around how a post-Brexit relationship between the two sides might take shape. The agreement now has to be ratified by U.K. and European parliaments.

Investors say that the deal won’t be a significant catalyst for U.S. markets but does remove one headwind for investors amid a plethora of virus and non-virus related worries.

Read: U.K. ETFs jump as Brexit deal is finalized

“Investors continue to look for confirmation that a US spending/COVID fiscal support deal and a UK/EU trade deal may be completed by the end of the year,” wrote Colin Cieszynski, chief market strategist at SIA Wealth Management, in a Thursday research note.  

Those political wrangles come as the U.K. announced tightened COVID lockdown measures, with a number of regions set to enter the toughest tier 4 level of restrictions on Saturday as the country battles to limit a variant of the virus that causes Covid-19 which is said to be more transmissible.

Which stocks are in focus?

Shares of e-commerce giant Alibaba Group BABA, -13.34% tumbled after reports that Chinese regulators on Thursday are pursuing an antimonopoly investigation. U.S.-listed shares finished down 13.4%.

Check out: China-linked ETFs fall as Alibaba shares skid nearly 14%

Shares of Cloudera Inc. CLDR, -0.80% may be in focus after the company said late Wednesday that it bought back all of Intel Corp.’s INTC, +1.07%  stake in the company for $314 million. Cloudera’s stock was down 0.9%, while Intel was up 1%.

Shares of software provider SolarWinds Corp.  SWI, -1.62% said Thursday that it has released updates in response to the “SUPERNOVA” malware that was used to hack into U.S. government computer systems. Its shares were down 1.5%.

How are other assets trading?

• In Asian trading, the Shanghai Composite SHCOMP, -0.57% closed 0.6% lower on Thursday, Japan’s Nikkei 225 NIK, +0.54% index rose 0.5%, while Hong Kong’s Hang Seng Index HSI, +0.16% closed up 0.2%.
• In Europe, the Stoxx 600 Europe SXXP, +0.12% and London’s FTSE 100 index UKX, +0.10% both rose 0.1%.
• The 10-year Treasury note yield TMUBMUSD10Y, 0.933% shed 3 basis points to around 0.93% . Yields and prices move in opposite directions.
• Oil futures were virtually flat, with the U.S. benchmark CL.1, +0.37% up less than 0.1% at $48.16 a barrel on the New York Mercantile Exchange, with the contract on track to halt its streak of seven consecutive weekly increases.
• Gold futures for February delivery GC00, +0.24% were up 0.2% at $1,882.70/oz. 
• A gauge of the U.S. dollar, the ICE U.S. Dollar Index DXY, -0.08%,  fell 0.1%.