It appears the Dow Jones Industrial Average was on Santa's nice list, while the S & P 500 was deemed naughty by the man in the North Pole. The "Santa Claus rally" period — which stretches from the final five trading days of December and the first two of January — concluded on Monday. The 30-stock Dow posted an impressive 1.1% in that time. The S & P 500 didn't fare as well, however, losing 0.1%. "The lack of a rally [in the S & P 500] can be a preliminary indicator of tough times to come," wrote Jeffrey Hirsch, editor-in-chief of the Stock Trader's Almanac. "This was certainly the case in 2008 and 2000. A 4.0% decline in 2000 foreshadowed the bursting of the tech bubble and a 2.5% loss in 2008 preceded the second worst bear market in history." All hope is not lost, however. A Santa rally didn't materialize last year either, though stocks were able to recover and scale to record highs. .DJI .SPX mountain 2025-12-23 Dow and S & P 500 during Santa rally This time, the S & P 500's lump of coal may have to do more with the bull market run broadening outside of artificial intelligence. This would explain the Dow's sharp outperformance relative to the S & P 500. The Dow has greater exposure to more cyclical sectors such as energy, industrials and financials than it does to AI, meaning gains in these areas will have a greater impact on the Dow than on the S & P 500. Chevron and Caterpillar were two of the best-performing Dow members during the Santa Claus rally. They gained 8.9% and 5.8%, respectively. The much of the former's advance came Monday after the U.S. ousted Venezuelan leader Nicolas Maduro. Investors were betting that energy companies will be able to gain access from Venezuela's vast oil reserves following the attack. Goldman Sachs , Honeywell and Sherwin-Williams also performed well during the Santa rally: Goldman: up 5.2% Honeywell: up 2.9% Sherwin-Williams: up 2.5% Goldman Sachs' trading desk expect this broadening to gain steam in 2026. "Accelerating US economic growth alongside easing monetary policy should drive upside in cyclical pockets of the equity market in early 2026, including stocks exposed to middle income consumers and firms tied to the nonresidential construction cycle," they said in a note.
