Wall Street witnessed a historic Santa Claus rally on Monday, December 22, 2025. The S&P 500 gained 0.64% to reach 6,878. The Nasdaq Composite climbed 0.52% to 23,428. The Dow Jones advanced 227 points to close at 48,362.
Artificial intelligence stocks powered this surge. According to Reuters, the expansion of the AI stocks economy rather than traditional retail strength is driving the markets higher.
Nvidia at the Heart of the Market
Nvidia (NVDA) shares rose more than 1%. The company alone accounts for 8% of the S&P 500 index. This represents the highest concentration for a single stock in over half a century.
Reuters reported that the Trump administration is reviewing Nvidia’s H200 chip sales to China. The company is expected to begin shipments to China by mid-February. Shipments are anticipated to total between 5,000 and 10,000 chip modules. This news boosted investor confidence.
Nvidia CEO Jensen Huang confirmed that Blackwell chips are sold out through mid-2026. This supply-constrained environment grants the company unprecedented pricing power. Gross margins remain at 73.5%.
Other AI Stocks Also Rising
Micron Technology (MU) gained around 4%. Strong quarterly results and future guidance supported the stock.
Oracle (ORCL) rose more than 3%. News of a TikTok joint venture deal with ByteDance in the US lifted shares.
The tech sector has become the market’s ultimate defensive and offensive play this holiday season. While traditional sectors grapple with inflationary pressures, the AI revolution is capturing investor attention.
S&P 500 Up Over 15% in 2025
The S&P 500 has gained more than 15% year-to-date. The index closed above 6,900 for the first time this month. The bull market remains alive despite tariff concerns and AI bubble fears.
Fundstrat head of research Tom Lee summarized the situation: “After 3 years of over 20% yearly gains, the bull market is still alive.”
The index delivered over 24% in 2023 and over 23% in 2024. It’s preparing to close 2025 strong as well.
Will the Santa Claus Rally Materialize?
According to Bespoke Investment Group data, the week including Christmas has been positive for the S&P 500 about two out of every three years since 1945. The average weekly gain is around 0.53%.
However, some analysts remain cautious. Prime Capital Financial deputy CIO Will McGough assessed the situation: “There’s not a whole bunch of things that are going to move the market. Everyone is rightfully looking for the Santa Claus rally.”
The S&P 500 approaching the 7,000 level is being closely watched. UBS analysts forecast the index could reach 7,700 in 2026.
Asian Markets Also Surging
The US tech rally spread to Asian markets. Japan’s Nikkei index tested historic highs. The weakening yen provided advantages to export companies.
However, yen weakness is raising currency war concerns in the region. The South Korean won and Taiwan dollar are also losing value. Central banks are evaluating intervention options.
The AI cycle continues to be the dominant force in global equity markets. Currency volatility is emerging as the primary risk factor.
