After skipping 2023 and 2024, stock market bulls are hoping Santa comes to Wall Street this year. The Daily Breakdown digs into the stats.
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What’s Happening?
The Santa Claus Rally is measured by the last five trading days of the year, and the first two trading days of January. For this year’s stretch, that means the Santa Claus period begins today (Dec. 24) and runs through January 5.
Investors often attribute this strength to lighter trading volumes, improved sentiment, and portfolio positioning ahead of year-end. While it’s not a guarantee of gains, the rally is closely watched because its presence can reinforce bullish momentum, while its absence may signal caution. As with all seasonal trends, it’s best viewed as a context-setting factor rather than a standalone investment strategy.
The Numbers…and a Word of Warning
Since 1950, this seven-day stretch has consistently delivered above-average returns for the S&P 500, with the index gaining 1.3% and finishing in positive territory more than 75% of the time. While that may not sound like much, it’s one of the most consistent seasonal patterns in the market.
But here’s the twist: If the Santa Claus Rally doesn’t show, some investors take that as a warning sign for the year ahead. As Yale Hirsch — who created the Stock Trader’s Almanac — famously said: “If Santa Claus should fail to call, bears may come to Broad and Wall.”
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The Setup — Coca-Cola
Coca-Cola shares are up roughly 12.5% year-to-date and recently pulled back after another approach toward record highs. That rally stalled in the $73–$74 range, a level that has acted as resistance for more than a year, as shown on the weekly chart (left).
Zooming in on the daily chart (right), KO recently retraced but found support at both its 50-day and 200-day moving averages. Following the pullback, the stock now offers a dividend yield of nearly 3%.
Coca-Cola’s weekly chart highlights a strong uptrend. From here, bulls will want to see that trend remain intact — ideally with KO holding above its key daily moving averages. If it can do so, another push toward current resistance may be in play. However, a deeper pullback could shift momentum in a more bearish direction over the days and weeks ahead.
Options
As of December 23rd, the options with the highest open interest for KO stock — meaning the contracts with the largest open positions in the options market — were the February 2026 $75 calls, followed by the January 2026 $75 calls.
Investors who are bullish could consider calls or call spreads as one way to speculate on further upside, while bearish investors could consider puts or put spreads to speculate on a further move to the downside. For options traders, it may be advantageous to have adequate time until the option’s expiration.
To learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
Despite expectations for strong growth over the coming 12 months, Nvidia stock had been struggling for traction. However, the stock has now rallied more than 10% amid a four-day win streak. Now up just over 40% on the year, bulls are hoping Nvidia can cap off the year with a strong performance. Dig into the fundamentals for NVDA.
SLV
Yesterday we talked about gold as it pushed to record highs, and silver’s doing it too. Silver bulls are rejoicing as the precious metal is now up almost 150% on the year. That’s also helped drive the SLV ETF higher, too. Up 26% so far in December, silver is going for its 8th straight monthly gain. Check out the chart for the SLV ETF.
Novo Nordisk shares jumped after the FDA approved the company’s oral Wegovy weight-loss pill, the first GLP-1 treatment in a daily tablet form, offering a more convenient alternative to injections. Investors see the approval as a major market catalyst that could expand access and boost adoption in the rapidly growing obesity treatment market, giving Novo a strategic edge over rivals like Eli Lilly.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.