Will a ‘Santa rally’ bring good cheer to the stock market next week? Here’s what analysts say

Core Viewpoint - The stock market is expected to experience a "Santa Claus Rally," with analysts from Goldman Sachs and Citadel Securities indicating a positive seasonal trend and potential for upward movement into year-end [1][2]. Group 1: Market Sentiment - Analysts believe that barring any major shocks, the current market conditions favor a positive seasonal period, with Goldman Sachs noting a cleaner positioning setup [1]. - Scott Rubner from Citadel Securities highlighted that retail participants are entering 2026 with strong conviction and the financial capacity to increase market participation [1]. Group 2: Market Performance - Major indexes are consolidating just below record highs, which increases the likelihood of a Santa Claus rally this year [2]. - As of December 19, the S&P 500 Index was up nearly 1% at 6,834.50, significantly above the 6,000 threshold, indicating a recovery after four consecutive days of losses [5]. Group 3: Santa Claus Rally Explanation - The "Santa Claus rally" refers to a market rally during the last five trading days of the year and the first two of the next year, with the S&P 500 Index historically gaining an average of 1.3% about 79% of the time since 1950 [3]. - Theories explaining the existence of this year-end rally include holiday spending, year-end bonuses being reinvested, general holiday optimism, and end-of-tax-year considerations [4].