With only a few trading days left in 2025, signs of the Santa Claus rally have emerged, sparking hope for investors. The phenomenon, observed since 1972, typically sees the S&P 500 gain an average of 1.3% during the last five trading days of December and the first two days of January.

Despite a brief downturn earlier in December, the S&P 500 bounced back with gains of 0.8% and 0.9% on Thursday and Friday, respectively. Analysts from Goldman Sachs are optimistic, noting the historically positive returns during the holiday rally period.

Tech stocks, which saw rotations out earlier in the year, received a boost heading into the Santa Rally. Banks are forecasting more gains in 2026, with an optimistic outlook on corporate earnings. Inflation eased in November, potentially paving the way for more Federal Reserve interest rate cuts. The Roundhill Magnificent Seven ETF, tracking top tech megacaps, rose 0.8% on Friday.

Read more at Yahoo Finance: Investors Hope the Santa Rally Is Hitching Up Its Reindeer