The stock market is experiencing a remarkable year, with all-time highs following the recent election. Analysts are optimistic about the potential for continued gains in December, driven by historical trends and strong market sentiment.
The stock market has been on a record run, buoyed by positive sentiment following President-elect Donald Trump’s victory. Despite concerns over potential tariff risks, analysts believe the fundamental backdrop remains supportive for continued growth.
As of November 29, the S&P 500 index closed at 6,032.38, reflecting a gain of 0.56%. The Dow Jones Industrial Average and Nasdaq 100 are also showing strong performance, contributing to a bullish outlook for the remainder of the year.
December has consistently been a strong month for the S&P 500, with the following characteristics:
According to CFRA’s Sam Stovall, December is the second-best month for the S&P 500 during election years, averaging a return of 1.3% since 1950. This year, the strong year-to-date performance is likely to encourage investors to chase the market into year-end.
During December, certain sectors tend to outperform others. The S&P MidCap 400 and SmallCap 600 indexes have historically shown strong performance, followed by:
Looking ahead, the potential for a Santa Claus rally could further boost market returns. This phenomenon typically occurs during the final five trading days of the year and the first two trading days of the New Year. Stock Trader’s Almanac editor Jeff Hirsch notes that since 1950, the S&P 500 has been up 79.73% of the time during this period, with an average gain of 2.58%.
With a record year behind them and historical trends favoring December, investors are optimistic about the stock market's potential for continued gains. As analysts suggest, staying with the momentum and trend could yield positive results as the year comes to a close.
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