The Weekly Update
Week of December 29th, 2025
By Christopher T. Much, CFP®, AIF®
Stocks delivered for investors last week as positive economic data and bullish holiday cheer powered the start of a “Santa Claus rally” past consumer bah humbug sentiment.
The Standard & Poor’s 500 Index rose 1.40 percent, while the Nasdaq Composite Index advanced 1.22 percent. Meanwhile, the Dow Jones Industrial Average gained 1.20 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, moved ahead 1.16 percent.
AI Stock Sleigh Delivers
Stocks rallied at the start of the week, riding pre-holiday momentum as artificial intelligence (AI) related technology names continued to drive gains.
Fresh data out Tuesday initially quashed market momentum, reflecting investor concern that the stronger-than-expected Q3 economic growth might dissuade the Fed from adjusting interest rates in 2026.
But those fears appeared to subside after a Fed official said the U.S. is “way behind the curve in terms of lowering rates” compared with other central banks around the world. Those comments, combined with continued momentum and market leadership from the AI trade, boosted sentiment and lifted the S&P 500 to a record close despite a fresh consumer confidence reading that missed expectations.
Christmas Eve brought more of the same, kicking off what’s known as the “Santa Claus rally” period—the last five trading days of the year and the first two trading days of the new year. The S&P hit new intraday and closing highs on Wednesday’s shortened trading day—its fifth consecutive session of gains.
While stocks largely went sideways on Friday amid thin holiday volume. The S&P 500 hit another intraday high, and all three major averages posted weekly gains. It was the S&P’s fourth weekly gain in five weeks.
GDP Jumps
The delayed Q3 gross domestic product report was released on Tuesday, showing that the economy grew at an annualized 4.3 percent rate. That number beat expectations by more than a full percentage point and marked the strongest economic growth in two years.
While it didn’t garner many headlines, another metric released on the same day told a similar story. Industrial production grew 2.5 percent year over year in November, which has been the highest annualized increase since September 2022 and nearly triple what it was at the start of 2025.
This Week: Key Economic Data
Monday: Pending Home Sales.
Tuesday: Case-Shiller Home Price Index. Minutes of the Fed’s December FOMC meeting.
Wednesday: Weekly Jobless Claims.
Thursday: NEW YEAR’S DAY—MARKETS CLOSED.
Source: Investor’s Business Daily – Econoday economic calendar; December 26, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
No major companies are reporting earnings this week.
Source: Zacks, December 26, 2025
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
