Don’t count out a Santa Claus rally just yet 23/12/2025

HOT stories for today

Market wrap:

• U.S. equities advanced Monday in a subdued session, marking the opening move in what traders hope will evolve into a year-end Santa rally. Gains came on light volume, with cyclical sectors setting the pace. Financials and materials led the S&P 500 higher, while consumer staples were the lone pocket of notable underperformance. Tesla extended its run to another record after Elon Musk said the company’s full self-driving technology was within reach. Nvidia shares climbed after reports it will resume shipments of higher-grade chips to China in February, with Reuters citing expectations for deliveries equivalent to 40,000 to 80,000 H200 units.
• In commodities, copper, silver, and gold pushed to fresh highs as investors rotated further into metals and rare earths after the U.S. seized another Venezuelan oil tanker over the weekend. Decliners were relatively scarce. Target, Whole Foods, and Walmart slipped amid ongoing fallout from a botulism contamination investigation tied to grocery products. Lamb Weston, a major supplier to McDonald’s, fell to a five-year low after posting weak earnings on Friday and warning of intensifying international competition.
• Investors are now turning their attention to Novo Nordisk, after the Wegovy maker won FDA approval for the first oral GLP-1 weight-loss pill, giving it an early edge over rival Eli Lilly. The stock jumped about 6% at the open on Tuesday. In Asia, equity markets opened mostly higher, tracking Wall Street’s AI-driven gains. U.S. stock futures hovered near flat late Monday, following a strong start to a holiday-shortened week. Several economic data releases are due later today.

Don’t count out a Santa Claus rally just yet.

• U.S. stocks have lost steam in December, with the S&P 500 slipping toward a monthly decline ahead of the final full week of the year. Even so, history suggests the odds still favor a late-year bounce during a period that has typically delivered gains regardless of earlier weakness. The Santa Claus rally, the last five trading days of December and the first two of January, begins Dec. 24. Since 1950, the S&P 500 has risen during that stretch 77% of the time, posting an average gain of about 1.3%, according to Dow Jones Market Data.
• That success rate holds even in years when stocks were already down earlier in December. Recent data showing cooling inflation and slower job growth may also help, potentially giving the Federal Reserve more room to cut rates next year. Lower yields typically support risk assets. Market breadth is another encouraging sign. Gains have spread beyond megacap tech, with banks and small-cap stocks outperforming. The Russell 2000 has beaten the S&P 500 this month, while equal-weighted indexes have held up better, signaling broader participation. Risks remain, particularly around lofty AI valuations and heavy capital spending. But with key support levels holding and leadership rotating into cyclicals, strategists say the setup for a year-end rally is still intact.

Stocks on the move:

• Dominion Energy (D): Shares of the utility slid nearly 5% after the Trump administration moved to halt five East Coast offshore wind developments, including Dominion’s Coastal Virginia Offshore Wind project, the largest of its kind in the U.S.
• Maplebear (CART): The parent of Instacart fell more than 3% after announcing it will discontinue artificial intelligence–driven pricing tests on its grocery platform, following customer backlash over uneven pricing for identical items at the same store.
• Rocket Lab (RKLB): The aerospace company surged about 10% after securing an $816 million contract to build a missile-defense satellite system for the U.S. Space Force.
• UniFirst (UNF): Shares jumped roughly 18% after Cintas (CTAS) submitted a takeover proposal valuing the workwear supplier at about $5.2 billion. The all-cash offer of $275 per share represents a 64% premium to UniFirst’s 90-day average closing price as of Dec. 11. Cintas shares rose about 3%.

Watchlist: NVDA, ORCL, AVGO, NVO, LLY, TSLA, COIN, RKLB

Key Economic Events Today:

EST time

08:30 am: USD Prelim GDP
08:30 am: USD Core Durable Goods Orders
08:30 am: USD Prelim GDP Industrial production (Oct. data)
09:15 am: USD Industrial Production
10:00 am: USD Consumer Confidence
10:00 am: USD Richmond Manufacturing Index



Earnings

No major earnings today



The TEFS Analyst team wishes you a successful day and Merry Christmas!