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December Upside for S&P 500 After 20%+ Rally, History Suggests

AInvestMonday, Dec 2, 2024 3:36 am ET
1min read

The U.S. stock market is on a record-setting trajectory, with the S&P 500 reaching over 50 all-time highs this year, and the Dow Jones Industrial Average and Nasdaq 100 also showing strong performance. This bullish trend is expected to continue, fueled by President-elect Donald Trump's victory and Wall Street's optimism about his economic policies, despite potential tariff-related volatility as noted by UBS's Mark Haefele.

Historically, December has been a robust month for the S&P 500, with the highest frequency of gains and lower volatility compared to other months. The S&P MidCap 400 and SmallCap 600 have particularly excelled, along with the Utilities, Industrials, Materials, and Financials sectors. This year is further distinguished by the election's impact, making December the second-best month for the S&P 500 in election years, with an average return of 1.3% since 1950, as analyzed by Carson Group's Ryan Detrick.

Moreover, when the S&P 500 has entered December with a gain of over 20%, it has seen an average December gain of 2.4%. The prospect of a Santa Claus rally, marking a rise in stock prices in the last five trading days of the year and the first two of the New Year, could also contribute to positive year-end performance.


Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.