Key Takeaways Stocks fell on Thursday, dampening investors' hope for a Santa Claus rally to start 2025.The S&P 500's average return in years without a Santa Claus rally is less than half its return in years with one (5% vs.

Santa Claus is leaving investors in the lurch once again in 2024 as U.S. stocks have struggled during the typically bullish home stretch of the year.

Stocks typically rally over the holidays, but that hasn’t happened this season.

Wall Street is eager for a so-called Santa Claus rally to propel the S&P 500—up about 25% this year through Monday's close—to new highs. According to Wall Street lore, the stock market consistently rises during the final five trading days of the year and the first two sessions of the next. This year, that stretch starts today.

The odds of a rising stock market are not significantly different whether or not there is a Santa Claus rally. The absence of a “Santa Claus rally” does not doom the U.S. stock market in 2025. That period from Christmas through the second trading day of January marks the traditional definition of the Santa Claus rally.

Santa might have a lump of coal for Wall Street this year. Stocks typically enjoy a so-called Santa Claus Rally in the period spanning the last five trading days of the year and the first two of the next.

Dec. 31 window, known as Santa Claus rally, averaging 0.85% return in 64 out of 96 years. 2018 saw strongest rally of 6.6%.

Stocks are stumbling into the end of the year. After falling 1% on Friday, markets are indicated lower by another 1% in premarket trading.

A few years ago, the "Stock Trader’s Almanac" compiled data during the 73 years from 1950 through 2022 and showed that a Santa Claus rally occurred 58 times —about 80% of the time — with the S&P 500 averaging a gain of about 1.4%.

An “almost light-switch moment” at the start of December sparked a “breakdown in breadth” this month in the U.S. stock market, following a strong rally in November, said Mark Hackett, chief market strategist at Nationwide, in a phone interview.