U.S. stock markets reopened Thursday after the Christmas holiday with major indices hovering near record highs. The S&P 500 traded around 6,940, just points below its all-time high, while Dow futures indicated a flat open after Wednesday's record-setting close at 48,731.

December 26: The Market's Best Day

Traders returned to find a favorable historical backdrop. According to data from Bespoke Investment Group, December 26 has been the most consistently positive trading day of the year for the S&P 500. The pattern holds across multiple decades, with the post-Christmas session delivering gains more reliably than any other calendar day.

The reasons are straightforward:

  • Institutional selling pressure subsides as year-end tax-loss harvesting concludes
  • Holiday optimism boosts consumer and investor sentiment
  • Thin trading volumes can amplify positive momentum
  • The Santa Claus rally window—historically strong—is in full effect

Santa Claus Rally Context

Wednesday's abbreviated Christmas Eve session marked the official start of the Santa Claus rally period. This seven-day window—spanning the last five trading days of December through the first two of January—has produced average S&P 500 gains of 1.3% with positive returns 78% of the time, according to the Stock Trader's Almanac.

The pattern serves as more than a curiosity. When the Santa Claus rally delivers gains, the S&P 500 has historically averaged a 2.6% return in the subsequent three months. When it fails, the index has averaged a 1% loss—giving the saying "if Santa Claus should fail to call, bears may come to Broad and Wall" empirical backing.

Where Markets Stand

As trading resumed, the major indices showed resilience:

  • S&P 500: Near 6,940, up approximately 17% year-to-date
  • Dow Jones: Hovering around 48,700 after Wednesday's record close
  • Nasdaq Composite: Trading near 23,600, up roughly 22% for 2025
  • Russell 2000: Small caps maintaining strength near recent highs

Key Movers

Nike (NKE): Shares extended their rally, building on Wednesday's 4.6% surge following Tim Cook's $3 million insider purchase.

Nvidia (NVDA): The AI chip leader drew attention following reports of its $20 billion acquisition of Groq, the largest deal in company history.

Precious metals miners: Gold and silver mining stocks rallied as the underlying metals hit fresh record highs.

Thin Trading Conditions

Investors should note that trading volumes remain well below normal levels. Many institutional traders are away through New Year's, leaving desks thinly staffed. These conditions can create outsized moves on relatively small order flow:

  • Order books are shallow, meaning large trades have greater price impact
  • Algorithmic trading represents a larger share of activity
  • Flash moves in either direction become more likely
  • News-driven volatility can be amplified

Economic Data Light

The calendar offers minimal catalysts through year-end. No major economic releases or earnings reports are scheduled for Thursday. The next significant data point arrives Tuesday with the December consumer confidence reading, though that too comes during the holiday-affected period.

Looking Ahead

With just four trading days remaining in 2025, the year is nearly in the books. The S&P 500's roughly 17% gain puts it on track for a third consecutive year of double-digit returns—a feat last achieved during the 1990s tech boom.

Key levels to watch:

  • S&P 500 6,932: Wednesday's record closing high
  • S&P 500 7,000: Psychological milestone within reach
  • Dow 49,000: Next major milestone for the blue-chip index

The Bottom Line

Markets returned from Christmas in a position of strength. With December 26's strong historical track record and the Santa Claus rally providing a seasonal tailwind, conditions favor continued gains through year-end. However, thin trading volumes mean investors should be prepared for volatility. The real test comes in January when institutional traders return and begin positioning for 2026.