By Connor Smith
Closing Stretch. The stock market's late-week rally continued on Friday to help lift the S&P 500 to a slight weekly gain. The Nasdaq Composite did even better.
The S&P 500 closed 0.9% higher on the day to lock in a weekly gain of 0.1%. The index fell last week, so it avoided its first back-to-back weekly declines since June 20.
The tech-heavy Nasdaq rose 1.3% today, or 0.4% on the week. The Dow Jones Industrial Average rose 183 points, or 0.4%, but dropped 0.6% on the week.
It was a quiet day for Wall Street traders. The University of Michigan's consumer sentiment index, at 52.9, was a touch below expectations of 53.4, but Wall Street was still in a jolly mood following yesterday's cooler-than-expected consumer price index.
AI stocks led the charge, though industrials, healthcare, financials, and materials were all among the day's winners.
David Donabedian, co-chief investment officer of CIBC Private Wealth, tells me he expects such unloved sectors to continue to benefit from a broadening of the stock market's rally.
He thinks the pieces are there for bull market to continue in 2026 thanks to a growing economy, improving earnings, and a friendlier central bank, though gains may be more muted than in recent years.
Donabedian doesn't think the AI rally is out of the woods, despite the two-day rally.
"I think that the issues that have maybe caused this pause in the great AI rally here are likely to continue to be things that investors are focused on in 2026," he says, noting the interplay AI adoption rates and hefty capital expenditures. "There's a little bit of investors waving a yellow flag on the AI theme."
Whatever happens in the new year, there are still two holiday-shortened weeks left in 2025.
Dec. 24, specifically, will mark the start of the so-called Santa Claus rally period. Typically stocks rally in the final five days of a year and into the first two trading days of the new year. Not everyone is sold on the seasonal trend, though.
"As we enter the best two-week stretch of the year through year end, investors are focused on the heavily discussed Santa Clause rally, though a consistent theme of the past five years is that historical patterns have provided little direction," writes Mark Hackett, chief market strategist at Nationwide.
As the market learned this week, it isn't about how you start, but where you finish.
The Hot Stock: Carnival +9.8% The Biggest Loser: Lamb Weston -25.9%
Best Sector: Technology +2.0% Worst Sector: Utilities -1.3%
This Weekend's Magazine
The Calendar
There are just seven trading days left in 2025. There no tier-one economic data to be released next week nor any major companies reporting earnings.
Trading on the Nasdaq and New York Stock Exchange close early, at 1 p.m. ET, on Wednesday. Markets are closed on Thursday in observance of Christmas.
During the holiday-shortened trading week, investors will still get third-quarter GDP growth estimates from the Bureau of Economic of Analysis on Tuesday as well as the durable goods report from the Census Bureau.
-- Dan Lam
What We're Reading Today
-- China's Tencent Is Accessing Banned Nvidia Chips Through the Cloud -- White House Cuts Drug-Pricing Deals With Pharma Companies, Tilting System Toward Self-Pay -- Get Ready for New Chip Shortages. Micron's Success All But Guarantees It. -- Lilly Shares Have Tripled on Weight-Loss Drugs. Why the Stock Looks Cheap. -- And this week's Barron's cover story: Predictions Markets Will Make the Stock Market Obsolete. Yes or No?
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(END) Dow Jones Newswires
December 19, 2025 19:55 ET (00:55 GMT)
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