A Festive Lift for Markets as Santa Rally Hopes Return
Markets Extend Their Momentum
U.S. stocks started the week on a positive note, building on last week’s strength and raising hopes of an early Santa Claus rally.
Santa Rally
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Dow Jones: +0.5%
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$S&P 500(.SPX)$ : +0.6%, now just 0.3% below its Dec. 11 record high
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$NASDAQ(.IXIC)$ : +0.5%
With major indexes hovering near all-time highs, investor confidence appears to be improving as the year winds down.
Santa Rally Back in Focus
The so-called Santa Claus rally, traditionally spanning the last five trading days of the year and the first two of the next (Dec. 24 to Jan. 5), is firmly back on investors’ radar. Market watchers suggest the trend favors further upside, potentially allowing stocks to close 2025 at new highs and start 2026 on solid footing.
Tech Leads, Staples Lag
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Technology stocks returned to favor, reinforcing their role as the market’s main engine in 2025 despite lingering concerns around AI valuations. $NVIDIA(NVDA)$ $Palantir Technologies Inc.(PLTR)$ $Broadcom(AVGO)$
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Materials also performed well, while consumer staples were the lone sector left behind, continuing a pattern seen throughout the year.
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Gold and silver hit fresh all-time highs, adding a seasonal shine to broader market optimism.
Quiet Calendar, Strong Sentiment
With no major earnings releases and little economic data scheduled during the holiday-shortened week, markets are being driven more by sentiment than fundamentals. Encouragingly for bulls, those “vibes” remain upbeat. Some strategists believe last week’s pullback marked the final low of 2025, setting the stage for a rally into early 2026.
Inflation: Good News, With a Caveat
Recent inflation data showed core CPI rising 2.6% year over year, below expectations, welcome news for consumers and markets alike. However, distortions from the government shutdown and delayed tariff effects suggest inflation pressures may not be gone for good. Retailers have so far absorbed costs, but 2026 could be when tariff-related price increases become more visible.
Conclusion
As the holidays approach, markets are embracing cautious optimism. Strong momentum, a supportive seasonal backdrop, and easing inflation fears are lifting stocks toward year-end highs. While risks remain, particularly around inflation and tariffs, the overall tone is festive, with investors increasingly focused on finishing 2025 strong and welcoming 2026 with confidence…
[Smile][ShakeHands][Salute]
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