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Stocks opened higher on the final Friday of 2025, but lost steam as the session wore on. Still, the Santa Claus Rally remains alive and well, which bodes well for equity investors in the new year.
Indeed, according to Yale Hirsch, who first identified the Santa Claus Rally in 1972 and published his findings in the 1973 edition of the “Stock Trader’s Almanac,” the seasonal period occurs over the last five trading days of the year and the first two of the new year.
The S&P 500 has averaged a noteworthy gain of 1.3% over this time frame since 1950, according to Jeff Hirsch, Yale’s son, and “failure to have a Santa Claus Rally tends to precede bear markets or times when stocks could be purchased at lower prices later in the year.”
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According to LPL Chief Financial Strategist Adam Turnquist, positive returns during this seasonal time frame have resulted in an average January gain of 1.4% and a full-year return of 10.4% since 1950. Negative returns have corresponded with an average January loss of -0.1% and a more modest annual return of 6.1%.
For this year, the Santa Claus Rally began at the open on Wednesday, December 24 and runs through the close on Monday, January 5, 2026.
The S&P 500 closed down 0.03% today at 6,929, but remains 0.3% higher from its December 23 close.
The Dow Jones Industrial Average (-0.04% at 48,710) and the Nasdaq Composite (-0.09% at 23,593) also finished slightly in the red today.
Gold and silver hit new highs
While the main stock market indexes made modest moves to end the week, there was noteworthy price action among commodities. Gold prices, for one, rose 1.1% to $4,529 per troy ounce – a new record high – bringing their year-to-date gain to 73%.
Silver prices also caught a bid, jumping 7% to $77.12 per troy ounce. They’ve now nearly tripled since the start of 2025.
One catalyst boosting the precious metals is shaky geopolitical tensions following the United States’ Christmas Day strikes on Islamic State targets in Nigeria.
Another is “worries that the Fed may cut [interest rates] too much next year,” says José Torres, senior economist at Interactive Brokers, which “are driving store-of-value bids for the safe-haven metals.”
According to CME Group FedWatch, futures traders are currently pricing in two quarter-point rate cuts for 2026 – one more than the Federal Reserve indicated in the dot plot it released after its December meeting.
Nvidia makes its biggest acquisition ever
In single-stock news, Nvidia (NVDA) rose 1% after the chipmaker said this week that it will purchase assets from high-performance artificial intelligence accelerator chip designer Groq for $20 billion in cash.
This marks Nvidia’s biggest acquisition ever and makes a small dent in the $61.7 billion in free cash flow the company had for the nine months ending October 26.
As part of the agreement, several members of the Groq team, including founder and CEO Jonathan Ross and President Sunny Madra, will “join Nvidia to help advance and scale the licensed technology.”
Argus lifts its price target on Monster stock
Monster Beverage (MNST) slipped 0.1% today but remains 47% higher for the year to date. (It’s also been one of the best stocks of the century, FWIW.) And Argus Research analyst John Staszak sees even more upside for the energy drink maker in 2026.
On December 24, Staszak reiterated his Buy rating on the consumer staples stock and lifted his price target to $90 from $85 – implied upside of nearly 17% from current levels.
“The company has an impressive history of expansion, with five-year compound annual sales and earnings-per-share growth rates of 13% to 15%,” says Staszak.
He points to Monster’s “clean” balance sheet as one reason to be bullish on the stock. And while valuations are rich, MNST deserves a “premium” valuation given the company’s product launches and effort to “improve market share and margins in fast-expanding emerging markets.”
