US stocks ended the holiday shortened week slightly lower on Friday but still delivered strong weekly gains, kicking off the traditional Santa Claus rally period with steady optimism.
Trading was quiet after Christmas, yet all three major indexes managed to close the week higher as investors looked ahead to the final stretch of the year.
Indexes pause, but weekly momentum stays intact
The Dow Jones Industrial Average slipped just below its recent record close, while the S&P 500 and the Nasdaq Composite edged modestly lower amid thin trading volumes.
Despite Friday’s muted finish, all three benchmarks gained more than 1% for the week, continuing a strong year end trend.
Earlier in the week, both the Dow and the S&P 500 closed at new all time highs, marking the fifth straight winning session for US stocks.
Santa Claus rally officially begins
Wall Street has now entered the so called Santa Claus rally, which covers the final five trading days of the year and the first two sessions of January.
Historically, this period often favors gains, and the current setup has reinforced investor confidence after a volatile but ultimately strong year.
So far in 2025:
- The S&P 500 is up nearly 18%
- The Nasdaq has climbed more than 20%, despite briefly entering bear market territory earlier in the year following April tariff shocks
Gold and silver surge to fresh records
While stocks consolidated, precious metals continued to soar.
Gold and silver futures pushed to new record highs, supported by geopolitical tensions and ongoing weakness in the US dollar. Gold is on track for its best annual performance since 1979, while silver has posted one of its strongest rallies in decades.
Nvidia lifts tech sentiment
Tech sentiment received a boost from NVIDIA, which gained more than 1% after news of a major licensing deal with AI chip startup Groq, reportedly valued at around $20 billion.
The move highlighted Nvidia’s strategy of using its large balance sheet to maintain leadership in the fast growing AI market.
Fed rate cut expectations continue to fade
Stocks have held their ground even as traders dialed back expectations for near term Federal Reserve rate cuts.
Markets are currently pricing less than a 15% chance of a rate cut next month, with outlooks for March more evenly split. No major economic data or earnings releases are expected in the final trading days of the year.
US stocks may have paused on Friday, but the bigger picture remains constructive. Weekly gains, record highs, and a strong start to the Santa Claus rally suggest Wall Street is closing out 2025 on a confident note, even as investors remain cautious about interest rates and global risks heading into the new year.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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