New York time check: It is 1:26 p.m. ET on Friday, December 26, 2025 in New York.
Wall Street is back from the Christmas break for a single, full trading session — and the tone so far has been calm, cautious, and close to record territory. With many institutional desks already “done” for the year, volume is light and price moves can look deceptively small… right up until a sudden burst of buying or selling hits thin liquidity.
That’s why today’s market is less about blockbuster headlines and more about how investors are positioning into the final stretch of 2025: whether the “Santa Claus rally” can extend, whether leadership broadens beyond mega-cap tech, and how much optimism is already priced into 2026.
US stock market right now: near highs, barely moving
As of late morning in New York, major indexes hovered near all‑time highs, with the S&P 500 briefly notching an intraday record before easing back. Reuters reported around 11:42 a.m. ET the Dow was down about 0.13%, the S&P 500 was essentially flat, and the Nasdaq was up about 0.05%. [1]
A look at key index proxies around early afternoon shows the same theme: little change, narrow swings.
- SPY (S&P 500 ETF): 689.91, down ~0.07%
- QQQ (Nasdaq 100 ETF): 624.13, up ~0.03%
- DIA (Dow ETF): 486.15, down ~0.18%
- IWM (Russell 2000 ETF): 251.00, down ~0.68%
That split matters: mega-cap tech is holding up, while small caps are softer — a common pattern in low‑liquidity sessions when investors stick to the most widely held, most liquid names.
Why trading is so quiet today (and why that can be risky)
Several forces are dampening market movement:
1) Post‑holiday volume is predictably thin.
MarketWatch, citing Dow Jones Market Data, noted that full-day total market average daily volume on Dec. 26 runs about 29% below an average trading day. [2]
2) There’s little fresh macro data to reset expectations.
Charles Schwab’s market update framed the day as a “bridge” session — light on catalysts, with traders urged to be cautious because low volume can amplify moves. [3]
3) Many big players have already locked in year-end positioning.
AP reported that institutional investors are largely closed out of positions for the year, contributing to muted action. [4]
The takeaway: a flat tape doesn’t automatically mean “no risk.” In thin markets, a modest headline can push prices more than it would on a normal week.
What’s driving the tape: AI “confidence test,” rotation, and rates
Even in a sleepy session, the market is still responding to a few major themes that have shaped the second half of 2025:
AI stocks are back in the driver’s seat — but 2026 is being framed as a “prove-it” year
Reuters highlighted that Friday’s market was supported by renewed interest in AI-related companies alongside signs of a resilient economy. [5]
But the optimism has a deadline. Brian Jacobsen, chief economist at Annex Wealth Management, told Reuters that 2026 is likely a “prove-it” year, with companies needing to show real productivity and margin gains from AI and other investments. [6]
That’s the core tension: AI enthusiasm is real — and so is investor impatience about turning spending into earnings.
A rotation story is still alive beneath the index surface
The S&P 500’s 2025 gains have been heavily influenced by mega-cap tech, but Reuters noted the rally has broadened recently as investors also moved into cyclical areas such as financials and materials. [7]
In its “week ahead” outlook, Reuters emphasized investors are watching for rotation as non-tech areas “shine,” and reported strategists see buying interest in areas where valuations are more moderate. [8]
Rate cuts remain the macro lever — and the next clues come fast
Markets are intensely focused on how many Fed cuts come next year.
Reuters reported the Fed lowered rates by 75 basis points over its last three meetings of 2025 to a target range of 3.50%–3.75%, and that minutes from the most recent meeting are the marquee event on the holiday‑shortened week ahead. [9]
Michael Reynolds, vice president of investment strategy at Glenmede, told Reuters that the minutes could offer insight into the arguments around the table — and that “handicapping how many rate cuts” arrive next year is what markets are focused on. [10]
Stocks making news today: Nvidia, Target, Tesla and more
Even when indexes are calm, individual names can move on company-specific catalysts:
Nvidia (and the AI supply chain)
Reuters reported Nvidia rose after agreeing to license chip technology from AI startup Groq and hire its CEO. [11]
Investopedia separately reported that Groq described the arrangement as a non-exclusive licensing agreement tied to inference technology, citing Groq’s own statement. [12]
Target (activist investor pressure)
Target shares jumped after reports that hedge fund Toms Capital Investment Management built a significant stake. Reuters said Target has posted three straight quarters of falling comparable sales and is working through a reset as it seeks to revive growth. [13]
Tesla (regulatory scrutiny)
Investopedia reported the National Highway Traffic Safety Administration opened an investigation into the mechanical door release on the 2022 Model 3 following a petition alleging it may not be easy to locate in emergencies. [14]
Barron’s also pointed to the same investigation as a driver of Tesla weakness in the holiday session. [15]
“Santa Claus rally” watch: the calendar is now part of the story
Seasonality isn’t a strategy — but at year-end it becomes a headline.
Reuters reminded investors that the “Santa Claus rally” typically refers to gains in the last five trading days of the year and the first two trading days of January, a window that runs through January 5 this cycle. [16]
MarketWatch added another seasonal stat: Dec. 26 has historically been one of the most consistently positive days for the S&P 500, though the same piece cautioned that seasonal patterns shouldn’t be treated as a stand-alone signal. [17]
The market implication: with the S&P 500 already near a milestone level, traders are watching whether momentum buyers show up in the final sessions — or whether profit-taking takes over.
The road to 7,000: why that level matters into next week
Beyond day-to-day noise, one number is dominating the year-end narrative: 7,000 on the S&P 500.
Reuters reported the S&P 500 was about 1% away from 7,000 and on track for an eighth straight monthly gain — potentially its longest monthly winning streak since 2017–2018. [18]
Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest Wealth Management, told Reuters that momentum favors the bulls — absent an external shock. [19]
2026 forecasts and strategist calls: where the bulls and bears disagree
Year-end is when outlooks collide. Here’s what major institutions and market voices are saying — and how it connects to today’s tape.
The “earnings growth can carry it” camp
Reuters cited LSEG-compiled data showing analysts expect S&P 500 profits to rise about 15.5% in 2026, improving from a 13.2% growth forecast for 2025. [20]
That’s the bullish backbone: if earnings keep accelerating, high valuations look less extreme.
Goldman Sachs’ 2026 outlook says it remains constructive on equities with earnings growth continuing — but it also warns that “hot valuations” could raise volatility and returns may be lower than 2025. [21]
The “good news is priced in” camp
Morgan Stanley argued that markets may have already priced in much of the anticipated upside — including expectations for rate cuts and policy support — which could limit further gains unless companies deliver. [22]
The “diversify, concentration risk matters” camp
Fidelity’s Jurrien Timmer wrote that 2026 could still be positive, but warned that valuations are high, concentration risk is real, and policy uncertainty looms, making diversification across regions and asset classes more important. [23]
Vanguard’s 2026 outlook emphasized that, over the next 5–10 years, U.S. stock returns — especially growth stocks — may be muted, and it highlighted stronger risk‑return profiles in high‑quality U.S. fixed income, U.S. value, and non‑U.S. developed markets equities. [24]
BlackRock’s equity outlook said it enters 2026 constructive on global equities, sees the AI investment cycle as long‑running, and also points to opportunities beyond the “AI juggernaut,” including international equities. [25]
The “S&P 500 could be down in 2026” warning
Business Insider reported that GMO’s Ben Inker expects the S&P 500 may be more likely down than up in 2026 because of heavy concentration in expensive AI-linked stocks — while also expecting a rotation where cheaper areas rise. [26]
Put together, these outlooks rhyme with today’s market action: tech steadiness, small-cap softness, and a lot of attention on whether breadth continues to improve.
Is the US stock market open now — and what should investors know before the next session?
Yes. The NYSE and Nasdaq are open today for normal trading hours (9:30 a.m. to 4:00 p.m. ET) after closing on Christmas Day and closing early on Christmas Eve. [27]
If you’re positioning for the next session (Monday) and the final days of 2025, here are the practical points investors are watching:
- Liquidity risk is real: spreads can widen and moves can be sharper in thin volume — use limit orders if trading. [28]
- Fed minutes are the major near-term macro catalyst: they’re due next Tuesday (per Reuters), and markets are sensitive to any signal on the pace of 2026 cuts. [29]
- Watch the 7,000 narrative: the closer the S&P gets, the more it can influence short-term behavior (momentum buying vs. profit-taking). [30]
- Expect year-end “positioning noise”: rebalancing and tax-driven trades can distort price action — especially when participation is low. [31]
- Know the holiday calendar ahead: markets are closed on New Year’s Day (Jan. 1, 2026), according to the NYSE and Nasdaq holiday schedules. [32]
Bottom line: Today’s market looks calm — but it’s a high-altitude calm near records, with thin liquidity and big expectations for 2026. The final sessions of the year will likely be less about new data and more about whether buyers keep showing up as the S&P 500 flirts with the next psychological milestone.
References
1. www.reuters.com, 2. www.marketwatch.com, 3. www.schwab.com, 4. apnews.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.investopedia.com, 13. www.reuters.com, 14. www.investopedia.com, 15. www.barrons.com, 16. www.reuters.com, 17. www.marketwatch.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.goldmansachs.com, 22. www.morganstanley.com, 23. www.fidelity.com, 24. corporate.vanguard.com, 25. www.blackrock.com, 26. www.businessinsider.com, 27. www.cbsnews.com, 28. www.schwab.com, 29. www.reuters.com, 30. www.reuters.com, 31. www.reuters.com, 32. www.nyse.com
