Post-Christmas Rise: Where Are Expectations in the Markets?

Expectations in the Markets After the Christmas Holiday

Investors foresee that the US stock markets will finish 2025 on a strong note. In the remaining trading days after the Christmas holiday, the major indices are expected to approach new rising milestones. At the beginning of the month, there were fluctuations in technology stocks due to concerns about artificial intelligence spending; however, despite this, the major indices are making progress toward closing December on a rise.

S&P 500 Index Breaks Record

The S&P 500 index drew attention by achieving its highest closing ever before the Christmas holiday on Wednesday. The index is just 1% away from reaching the 7,000 level. Additionally, it is expected to complete its eighth consecutive month in the positive, which would represent the longest monthly rising streak since 2017-2018.

Sectoral Differences in Market Performance

Throughout 2025, the S&P 500 recorded an increase of approximately 18%, while the Nasdaq Composite Index rose by 22%. However, in recent weeks, technology stocks have performed weaker, drawing attention. Meanwhile, finance, transportation, healthcare, and small-cap stocks have achieved strong gains. Since the beginning of November, the S&P 500 technology index has decreased by over 3%, while significant increases have been observed in other sectors.

Year-End Interest Rate Cuts and Market Expectations

Market analysts are focused on signals regarding future interest rate cuts from the Federal Reserve in the last trading days of the year. The Fed has made a total reduction of 75 basis points in its last three meetings of 2025, bringing the policy rate down to the range of 3.50% to 3.75%. The decision regarding the last interest rate cut in December was not made unanimously. The differing expectations for the coming year are capturing the attention of investors.

Conclusion

For investors, 2025 continues to be a critical period for monitoring market dynamics and sectoral changes. If the positive momentum in the markets does not deteriorate, an upward trend for stocks is expected to continue.