The 'Santa Claus rally' has arrived; get ready for the 'January effect,' says analyst.

Written by Emily J. Thompson, Senior Investment Analyst

Source: SeekingAlpha

Updated: Dec 22 2025

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Source: SeekingAlpha

Santa Claus Rally Performance: The Santa Claus rally, occurring from Dec. 24 to Jan. 5, has historically yielded an average gain of 1.6% for the S&P 500, with a 77% success rate over the past 97 years. Conversely, when this rally fails, the following quarters tend to see below-average performance.
January Market Trends: Analysts at Oppenheimer note that when the S&P 500 starts January above its 200-day moving average, it has historically averaged a 1.2% gain, compared to a 0.7% gain when starting below this level.
Momentum Factor Insights: January is typically the worst month for momentum strategies, as prior year losers are often repurchased, reflecting tax loss harvesting from December.
S&P 500 Tracking ETFs: A list of S&P 500 tracking ETFs includes SPY, VOO, IVV, RSP, SSO, UPRO, SH, SDS, and SPXU, providing various options for investors to engage with the index.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.