U.S. stocks rose for the third consecutive session on Monday, December 22, as artificial intelligence-related names staged a comeback and investors positioned for the holiday-shortened trading week. The S&P 500 gained 0.64% to close at 6,878.49, putting the index within striking distance of record highs.

Market Scorecard

Monday's performance across major indices:

  • S&P 500: +0.64% to 6,878.49
  • Dow Jones Industrial Average: +227.79 points (+0.47%) to 48,362.68
  • Nasdaq Composite: +0.52% to 23,428.83

The gains mark a three-day winning streak that has helped stocks recover from the post-Fed selloff earlier in the month.

AI Stocks Lead the Way

Artificial intelligence-related names were the market's driving force:

Nvidia (+1%): Shares climbed after Reuters reported the company is targeting mid-February for the first shipments of H200 chips to China. The news suggests Nvidia is moving quickly to capitalize on its export approval and rebuild its China revenue stream.

Micron (+4%): The memory chipmaker continued its post-earnings surge after last week's blowout results showed AI memory demand far exceeding supply.

Oracle (+3%): The database giant advanced as investors looked past December's selloff triggered by heavy AI infrastructure spending plans.

Tesla Jumps on Court Ruling

Tesla shares rose 2% toward the $500 level after the Delaware Supreme Court reinstated CEO Elon Musk's 2018 compensation package. The ruling overturned a lower court decision that had voided the pay plan, worth potentially tens of billions of dollars in stock options.

The stock has been on a tear in recent weeks, buoyed by Musk's proximity to the incoming Trump administration and expectations of favorable regulatory treatment for Tesla's autonomous driving ambitions.

Holiday Trading Outlook

Markets face a shortened week:

  • Tuesday (Dec 23): Normal trading; GDP data, consumer confidence
  • Christmas Eve (Dec 24): Markets close at 1:00 PM ET
  • Christmas Day (Dec 25): Markets closed
  • Friday (Dec 26): Normal trading resumes

Volume is expected to drop 40-50% below normal levels as institutional traders take holiday leave. The thin trading can amplify volatility in both directions.

Santa Claus Rally Watch

The so-called Santa Claus rally—the tendency for stocks to rise in the final five trading days of the year plus the first two of January—officially begins on Christmas Eve. Since 1950, the S&P 500 has posted positive returns during this seven-day window 79% of the time, averaging a 1.3% gain.

Whether the pattern holds this year remains uncertain. December's early weakness, driven by the Fed's hawkish guidance, put stocks in a hole they're still climbing out of.

Year-to-Date Context

Despite recent volatility, 2025 has been another strong year for stocks:

  • S&P 500: +17% year-to-date
  • 2024 return: +24%
  • 2023 return: +23%

A third consecutive year of strong gains would mark a remarkable run for U.S. equities—one increasingly driven by a handful of mega-cap technology companies.

What's Moving Markets

Key factors investors are watching:

  • Fed rate path: Markets now expect only two cuts in 2026, down from earlier expectations of four or more
  • AI spending: Continued investment in AI infrastructure supports tech earnings but raises valuation questions
  • Geopolitics: Gold's record run reflects ongoing uncertainty about global stability
  • Economic data: Tuesday's GDP and consumer confidence reports will set the tone for year-end

The Bottom Line

Monday's gains suggest the post-Fed selloff has run its course—at least for now. With AI stocks back in favor and the Santa Claus rally period approaching, conditions favor continued gains into year-end. But thin holiday trading means investors should be prepared for unexpected volatility. The real test comes in January, when normal volumes return and 2026 positioning begins in earnest.