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There are 22 trading days left in the year and the setup for stocks looks promising.
The S&P 500 is up more than 16 percent in 2025, and it’s not impossible to think it could secure its third consecutive 20 percent annual return before the calendar changes.
That’s only happened once before, during the 1990s bull market that preceded the bursting of the internet bubble.
The tailwinds seem to be in place. Not only are the holidays historically favorable for investors, but Corporate America just concluded one of its best earnings seasons in years, the Fed is likely to cut interest rates in December and all signs point to a sustained AI trade in 2026.
Meanwhile, markets could draw further stimulus from the One Big Beautiful Big that kicks in after January.
And even though a 16 percent return year-to-date is not an anomaly in recent decades, it’s worth remembering that the S&P 500 fell roughly 20 percent in April.
That means the benchmark index has actually climbed 36 percent from lows, which would put it in even more rare territory against history.
During the last week of December, the market will enter its final bullish sprint of the year in what’s become known as the Santa Rally:
- S&P 500 has a 79 percent win rate in the period since 1950
- S&P 500 gains an average of 1.3 percent
- Nasdaq gains an average of 1.8 percent
Of course, past performance doesn’t guarantee future results.
That said, there is wisdom in paying attention to seven decades of market seasonality.
The final deadline for the 2026 Inc. Regionals Awards is Friday, December 12, at 11:59 p.m. PT. Apply now.
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Phil Rosen
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