Santa Claus rally
Template:Short description A Santa Claus rally is a calendar effect that involves a rise in stock prices during the last 5 trading days in December and the first 2 trading days in the following January.,<ref name=Yahoo>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name=investopedia>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> According to the 2019 Stock Trader's Almanac, the stock market has risen 1.3% on average during the 7 trading days in question since both 1950 and 1969.<ref name=investopedia/><ref name=hohoho>Template:Cite news</ref> Over the 7 trading days in question, stock prices have historically risen 76% of the time, which is far more than the average performance over a 7-day period.
However, in the weeks prior to Christmas, stock prices have not gone up more than at other times of the year.<ref>Template:Cite news</ref><ref>Template:Cite journal</ref>
In 2024-2025, the S&P 500 completed a reverse Santa Claus rally by selling off during every business day between Christmas and New Year’s, a historic first for the index.Template:Citation needed
The Santa Claus rally was first recorded by Yale Hirsch in his Stock Trader's Almanac in 1972.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>
The Dow Jones Industrial Average has performed better in years following holiday seasons in which the Santa Claus rally does not materialize.<ref>Template:Cite news</ref><ref name=hohoho/>
Causes
There is no generally accepted explanation for the phenomenon.<ref name=investopedia/> The rally is sometimes attributed to the following:
- Increased investor purchases in anticipation of the January effect<ref name=investopedia/>
- Lighter volume due to holiday vacations makes it easier to move the market higher<ref name=hohoho/>
- A slow down in tax-loss harvesting that depresses prices at the beginning of December<ref name=hohoho/>
- Short sellers / pessimistic investors tend to take vacations around the holidays<ref name=investopedia/>