Post-Christmas Rise: Where Are Market Expectations?

Post-Holiday Market Expectations

Investors expect that the U.S. stock markets will finish 2025 with a strong close. In the remaining trading days after the Christmas holiday, the main indices are expected to approach new upward milestones. At the beginning of the month, fluctuations occurred in technology stocks due to concerns regarding artificial intelligence spending; however, despite this, the main indices are on track to close December with gains.

S&P 500 Index Sets Record

The S&P 500 index attracted attention by achieving its highest closing ever on Wednesday, just before the Christmas holiday. The index is only 1% away from reaching the 7,000 level. Additionally, it is expected that the index will complete its eighth consecutive month in positive territory, marking the longest monthly gaining streak since the 2017-2018 period.

Sectoral Differences in Market Performance

Throughout 2025, the S&P 500 is expected to increase by approximately 18%, while the Nasdaq Composite Index is projected to rise by 22%. However, technology stocks have shown weaker performance in recent weeks. In contrast, financial, transportation, healthcare, and small-cap stocks have achieved significant gains. Since the beginning of November, the S&P 500 technology index has declined by more than 3%, while noticeable increases have been observed in other sectors.

Year-End Interest Rate Cuts and Market Expectations

Market analysts are focused on signals regarding potential interest rate cuts from the Federal Reserve (Fed) in the last trading days of the year. The Fed has reduced the policy rate by a total of 75 basis points in the last three meetings of 2025, bringing it to a range of 3.50%-3.75%. The last interest rate cut decision in December was not made unanimously. The differing expectations for the upcoming year are capturing investors' attention.

Conclusion

For investors, 2025 continues to be a critical period for monitoring market dynamics and sectoral changes. If the positive momentum in the markets is maintained, an upward trend for stocks is expected to continue.