Overview
- After five straight gains, the S&P 500 and Dow ended Friday just shy of record highs set on Christmas Eve, with weekly advances of about 2.3% and 1.6% as the Nasdaq rose roughly 2.5%.
- As of Dec. 19, the Shiller CAPE for the S&P 500 stood at 40.15, a level characterized as the second highest in roughly 155 years of data, versus a long-run average near 17.3.
- Wall Street is watching the so-called Santa Claus rally carry into the final trading days of the year, with ADP employment data and the December FOMC minutes slated for Wednesday.
- For 2025 through Dec. 19, the Dow, S&P 500, and Nasdaq gained 14%, 16%, and 20%, respectively, powered by enthusiasm for artificial intelligence, quantum computing, and expected Federal Reserve rate cuts.
- Strategists project further gains in 2026, with S&P 500 targets ranging from 7,500 at JPMorgan and HSBC to 8,000 at Deutsche Bank, though some analysts stress valuation signals indicate elevated risk rather than precise timing.