After closing the books on a banner year for US stocks, investors expect to ride seasonal momentum into mid-January when a slew of economic data and a transition of power in Washington could send markets moving. The S&P 500 rose almost 27 percent in 2024 through December 26, while the technology-heavy Nasdaq Composite index, which surpassed 20,000 for the first time in December, is up 33.4 percent.
November through January is traditionally a strong period in the market, said Michael Rosen, chief investment officer at Angeles Investments. Additionally, stocks tend to do well in the last five trading days of December and into the first two days of January, a phenomenon dubbed the Santa Claus rally, which has driven S&P gains of an average of 1.3 percent since 1969, according to the Stock Trader’s Almanac. For the last four trading sessions, the S&P rose 2.91 percent, while the Nasdaq is up 3.3 percent, lifting hopes for a repeat. Just how long that momentum lasts will depend on several forces that could help drive markets in 2025. Monthly US employment data on January 10 should give investors a fresh view into the health and strength of the US economy. Job growth rebounded in November following hurricane- and strike-related setbacks earlier in the year. The market’s strength will be tested again shortly after, when US companies start reporting fourth-quarter earnings. Investors anticipate a 10.6 percent earnings per share growth in 2025, versus a 1