① The "Santa Claus Rally" typically refers to the potential rise in the U.S. stock market during the five trading days spanning the end of each year and the start of the new year. This year's "Santa Claus Rally" window begins on December 24; ③ numerous investment professionals on Wall Street expect the "Santa Claus Rally" to arrive, providing a smooth close to this year and setting a positive tone for 2026.
Every Christmas, investors pray for the same thing: they hope that Santa Claus will bring them a rise in the stock market, which is known in the investment world as the "Santa Claus Rally."
The "Santa Claus Rally" refers to the period covering five trading days at the end of each year and the start of the new year, indicating a high likelihood of a rise in the U.S. stock market during these days. This year’s "Santa Claus Rally" time window begins tonight, December 24.
Is "Santa Claus" about to arrive tonight?
Since the beginning of this year, the U.S. stock market has performed strongly overall. Since the lows in April, U.S. stocks have continued to rebound, with the S&P 500 Index repeatedly hitting new record highs. Despite significant volatility in December, U.S. tech stocks have regained momentum in recent days as Micron Technology’s earnings report restored investor confidence in the AI sector.
The S&P 500 Index hit a new high again shortly after the market opened on Wednesday.
Numerous investment professionals on Wall Street stated that they anticipate continued U.S. stock market gains during the Christmas holiday period, ensuring a smooth end to this year and a strong start to 2026.
Louis Navellier, Chairman and Chief Investment Officer of Navellier & Associates Investment Firm, believes that the current conditions of the U.S. stock market have paved the way for the "Santa Claus Rally." He noted that concerns over artificial intelligence trading are easing, and many sectors of the market are showing strong performance.
Naveillier noted that U.S. small-cap stocks have recently demonstrated strong momentum,Russell 2000 Indexwith the largest gains, indicating a further increase in investors' risk appetite as the new year approaches.
"The trend is our friend, and 2026 looks to be off to a strong start, with the potential 'Santa Claus Rally' back on the agenda," Navellier said.
Mark Hackett, Chief Market Strategist at Nationwide, the largest financial services institution in the U.S., also expressed optimism about the possibility of a year-end "Santa Claus Rally."
Hackett reminded investors that as momentum in the U.S. stock market weakens, market conditions may cool somewhat by early 2026, but he believes there is much to be optimistic about in the current situation.
"The final two weeks of this year represent the best-performing period on the calendar since 1950," he said. He also noted that, since 1928, the market has risen during the last two weeks of the year 80% of the time, with an average gain of 1.6%.
Hackett stated, "When this pattern becomes widely discussed, it may turn into a self-fulfilling prophecy."
Bullish Outlook for Technology Stocks
Clark Bellin, President and Chief Investment Officer of investment advisory firm Bellwether Wealth, also believes that while some volatility may still occur in the market, the 'Santa Claus rally' is approaching.
He stated, "Although the market may appear volatile in recent weeks, stock prices have generally remained range-bound as of the end of December, and the seasonally strong year-end performance could be the catalyst needed to push the market out of its current narrow trading range."
Bellin added that his firm expects further growth in the U.S. technology sector in 2026, and he is not alone in this view. Paul Stanley, Chief Investment Officer of Granite Bay Wealth Management, believes that technology stocks are likely to gain upward momentum in the near term.
He pointed out, "Low trading volumes and the absence of negative news should allow the Santa Claus rally to continue and remain robust through the remainder of 2025… While valuations of technology stocks are high, some companies like the 'Magnificent Seven' have actually underperformed the S&P 500 Index this year, indicating room for further upside, and not all technology stocks are overvalued or excessively optimistic."
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Editor/Doris