Wall Street Delivers Post-Christmas Gift to Investors

U.S. stocks are experiencing a positive trend as the Christmas holiday approaches. The S&P 500 reached a new intraday record on December 24, just before the holiday. However, investors are particularly looking forward to December 26, the day after Christmas, which has historically provided significant gains.

Wall Street’s Post-Christmas Gift to Investors

According to Bespoke Investment Group, December 26 is the most consistently profitable day for investors since 1953. This trend has been observed over 39 years of data analysis.

Historical Performance of December 26

• The S&P 500 has declined only six times on December 26 since 1953.
• In those occurrences, the index never dropped more than 0.5%.
• The average gain on this day is approximately 0.5%, with a median gain of 0.4%.

The Bespoke team commented that while seasonal trends should not solely dictate investment strategies, the data supports a strong historical performance. This year’s post-Christmas trading session is particularly crucial.

The Santa Claus Rally Impact

This trading day falls within the “Santa Claus rally” period, which encompasses the last five trading days of the calendar year and the first two days of the next. Unfortunately, this stretch has led to negative returns in the previous two years. Historically, it is unusual for the market not to rally three years in a row.

Current Market Trends

• The S&P 500 increased by 0.3% on December 24.
• The Nasdaq Composite also saw a slight increase of 0.2%.
• The Dow Jones Industrial Average performed best, rising by 0.6%.

As investors anticipate the post-Christmas trading, all eyes will be on Wall Street. December 26 stands to offer what could be seen as a “gift” to market participants as they hope for a strong rally.