Dec. 26 has historically been the strongest trading day of the year, according to Bespoke Investment Group.
U.S. stocks headed into the Christmas holiday on a high note Wednesday, with the S&P 500 notching a fresh intraday record during the shortened Christmas Eve session.
But for investors, Wall Street’s real gift often arrives the day after Christmas.
Bespoke Investment Group’s analysis shows that Dec. 26 has been the most consistently positive session of the year for the S&P 500. In the 39 years since 1953 when markets were open the day after Christmas, the index fell just six times — and never by more than 0.5%.
When trading occurs on Dec. 26, the S&P 500 also posts its best average gain of the year at 0.5%, along with the highest median gain at 0.4%.
“Seasonal trends should never be used as the sole reason to go long or short the equity market, but this pattern has been remarkably consistent,” the Bespoke team said in commentary shared with MarketWatch.
This year, Friday’s session marks the second day of the so-called Santa Claus rally — the seven-day period covering the final five trading days of one year and the first two of the next. The setup carries added significance after the rally delivered negative returns in each of the past two years.
Dow Jones Market Data shows Santa has never failed to show up three years in a row.
Stocks were broadly higher Wednesday. The S&P 500 gained 0.3%, the Nasdaq rose 0.2%, and the Dow Jones Industrial Average led the major indexes with a 0.6% advance.
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