2025 draws to a close next week as investors brace for a new year
The S&P 500 is on the cusp of all-time highs with just two trading sessions left in the year.
TL;DR
- Major stock averages are nearing all-time highs at the end of 2025.
- The S&P 500 is expected to achieve another double-digit advance in 2026, supported by monetary policy, fiscal stimulus, and AI.
- 2026 is a midterm election year, which historically leads to increased market volatility, especially in the second half.
- Current market valuations are considered high, potentially increasing fragility.
- The Santa Claus rally, a period around year-end and the new year, historically boosts the S&P 500.
- The first five trading days of the new year historically serve as an indicator for the market's full-year performance.
- FOMC minutes are scheduled for release on Wednesday.