Weekly Market Update for December 26, 2025
by Gavyn Jensen-Schneider, Research Associate
Indices have trended upward this week on a burst of holiday positivity. The S&P 500 finished the week up +1.4%, while the Nasdaq grew 1.2%. The 10-Year Treasury yield, an interest rate indicator, closed at 4.14%, down -1 basis points (bps) from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, went down -2 bps to 3.58%.
The “Santa Rally” has been in full swing this week, pushing the S&P 500 to fresh record highs. The Santa Rally refers to the consistent market outperformance during the last five trading days in December, and the first two trading days of January. In the last 75 years, the stock market has averaged gains of around +1.3% during these seven trading days. Thus far, the market is looking to follow this historical trend.
The market rally does come on the back of some mildly positive, albeit delayed, economic data. Third quarter GDP—covering July, August and September—accelerated to 4.3%, well above analyst expectations of 3.0% for the quarter. Core Personal Consumption Expenditure (PCE) inflation for the third quarter also showed some acceleration, moving from 2.6% year-over-year in Q2 to 2.9% in Q3, though this was in line with analyst expectations. With these measures coming nearly three months after Q3 ended, their relevance to the current state of the macroeconomy is limited, but they do suggest the economy was chugging along through the later part of the summer.
The New Year’s Holiday creates another odd trading week, with markets—and our office—closed Thursday in observance of the federal holiday. Economic data releases are minimal, with Wednesday’s weekly unemployment claims highlighting the quiet release schedule.
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