Review Preview: Festive Vibes

Dec 22, 2025 19:55:00 -0500 by Teresa Rivas | #Markets #Review & Preview

Merry & Bright. Stocks built on last week’s strength on Monday, perhaps an early start to the Santa Claus rally.

The Dow Jones Industrial Average gained 228 points, or 0.5%, while the S&P 500 gained 0.6% and the Nasdaq Composite rose 0.5%.

The S&P 500 is just 0.3% from its Dec. 11 record high.

“The trend is our friend, 2026 looks to have a strong start, and a potential Santa Claus rally is back on the table, which would leave us ending the year at new highs,” notes Louis Navellier of Navellier Calculated Investing. The s-called Santa Rally is an historically strong period spanning the last five trading days of the year and the first two of the next, which this year runs from Dec. 24 to Jan. 5.

Only consumer staples were left out of the party today, as they have been so often this year. Silver and gold made seasonally appropriate fresh all-time highs, and tech was once again back in investors good graces.

“Despite bouts of volatility and concerns about the health of the AI trade, tech has led the market to the upside this year, and it will probably be the difference between a positive and negative December for U.S. stocks,” writes Chris Larkin, managing director, trading and investing at E-Trade from Morgan Stanley.

With no earnings reports and minimal data on the docket this holiday-shortened week, there’s not much for investors other than vibes. Luckily they seem to be festive ones.

Vermillion Research Global Strategist Ross LaDuke believes that “last week’s low of 6720 on S&P 500 will likely be the low for the rest of 2025, and we would look for a rally into early-2026.”

Company

Last

Chg

Chg%

Dow Jones Industrial Average

48,731.16

288.75

0.60%

S&P 500 Index

6,932.05

22.26

0.32%

NASDAQ Composite Index

23,613.31

51.46

0.22%

Market Data as of

The Hot Stock: First Solar +6.6%
The Biggest Loser: Seagate Technology -4.6%

Best Sector: Materials +1.4%
Worst Sector: Consumer Staples -0.4%

Created with Highcharts 9.0.1Monday, Dec. 22Index performanceSource: FactSetAs of Dec. 24, 2:50 p.m. ET

Created with Highcharts 9.0.1Dec. 24-0.2-0.100.10.20.30.40.50.60.7%Dow industrialsS&P 500Nasdaq Composite

Price Anxiety

The most recent consumer price index showed that core inflation grew 2.6% in the year through November, below the 3% economists expected. That’s somewhat good news for holiday shoppers.

But the November’s number was likely distorted because of the government shutdown: Many Bureau of Labor Statistics staffers weren’t on the job earlier in the month, meaning that the post-Thanksgiving Black Friday sales had a disproportionate impact on the numbers, skewing the results.

As my colleague Joe Light reports, “This year’s expected tariff shock to prices never arrived.” But that doesn’t mean it isn’t impacting inflation:

Without the tariffs, inflation would have likely declined to about 2.2% this year, said Harvard professor Alberto Cavallo, who helps run the Harvard Business School Pricing Lab. Retailers have begun to pass through their higher costs, but only partially, in part because implementation delays, exemptions, and trade talks have kept firms guessing about where prices will settle…

Another big reason for the muted effect so far is that tariffs never actually hit the levels that the White House said they would in April, when President Donald Trump pointed to a poster board showing a 10% “baseline” tariff rate on most countries along with so-called reciprocal tariffs of up to 50%. Almost immediately after announcing the tariffs, the White House paused them to allow for trade negotiations. While some of the levies have come back, they’ve often been at much lower rates than what was announced.

Retailers are rolling out price increases as slowly as possible, to avoid denting sales. But Joe writes that stores are running out of options that they had this year—like importing goods before tariff implementation—to delay higher prices. If so, next year could be when tariff’s effects are really felt.

The Calendar

The Bureau of Economic Analysis releases its initial estimate of third-quarter GDP growth tomorrow. The consensus estimate is for GDP to have grown at an annual rate of 3.2%, down from 3.8% in the second quarter.

The Census Bureau releases the durable goods report for October. New orders for manufactured durable goods are expected to decline 1.5% month over month to $313 billion. Excluding transportation, new orders are seen rising 0.3%, compared with a 0.6% increase in September.

The Conference Board releases its Consumer Confidence Index for December. Economists forecast a 91.7 reading, three points more than in November. Consumers continue to have a dour economic outlook, with November’s reading the second lowest since the onset of the Covid-19 pandemic, after April’s tariff-induced shock.

What We’re Reading Today

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