Azzad MarketWeek
Stocks posted solid gains in an action-packed week of market-moving economic data, geopolitical news, and bullish new year sentiment.
The Standard & Poor’s 500 Index gained 1.57 percent, while the Nasdaq Composite Index added 1.88 percent. The Dow Jones Industrial Average rose 2.32 percent.
Santa Visits Dow, But Not S&P, Nasdaq
Stocks rose early Monday, led by the Dow Industrials, as investors looked past the news from Venezuela.
By Monday’s close, the Dow Industrials had gained enough to make the “Santa Claus Rally” a reality, pushing the Average to a 1.1 percent gain for the seven-session period (the last five trading days of 2025 and the first two of 2026). However, the S&P and Nasdaq came up short.
All three major averages continued their rise through midweek as the AI trade—led by chip manufacturers—helped momentum. The Dow Industrials crossed the 49,000 level for the first time, and both the S&P 500 and Dow hit record closes as well as all-time intraday highs.
The Dow then moved back into the “pole position” over the next session as investors appeared to rotate out of technology stocks and into other sectors, including cyclical stocks. Defense stocks got a boost from the president’s call for a $1.5 trillion annual defense budget in 2027—higher than the Pentagon’s target. The December jobs report, released on Friday, showed modest job gains and a slight decline in the unemployment rate. Investors cheered the news, believing the update gave the Fed some flexibility with rates at its January meeting.
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
