Multiple positive factors are accumulating, will the US stocks kick off the "Santa Claus rally" this week?

Last Friday, the stock market rebounded, marking the end of a week where major stock indices saw fluctuations, and also the last complete trading week of 2025. Before the last seven trading days of 2025, the three major stock indices will all be near historical highs, with a difference of no more than 3%. This week, the US stock market will experience a relatively quiet week. The US stock market will only open for half a day on Wednesday, and will be closed on Thursday for Christmas. Many international markets will also continue to be closed on Friday. In the upcoming week, investors who are still active during the holiday season will shift their focus to the outlook for the "Santa Claus rally", and on Tuesday, some lagging data delayed due to the US government shutdown will be released. The Consumer Confidence Index released by the World Federation of Large Companies on Tuesday morning should be the focus, as a major trend in 2025 is the K-shaped economy emerging among US consumers. Economic Data: Watching Consumer Situation Consumer sentiment during the holiday season in the US this year is slightly subdued compared to last year. Data released by the University of Michigan last Friday showed that the Consumer Confidence Index in December rose slightly from November, but at 52.9, it is 28.5% lower than December of last year. Meanwhile, home sales in November saw a slight increase for the third consecutive month, but according to data from the National Association of Realtors, sales in 2025 are likely to end the year at their lowest levels in 25 years. Joanne Hsu, director of the Michigan Consumer Survey, said, "Consumers clearly indicated that they believe the economic outlook has deteriorated significantly since the beginning of the year." This week will see a dense release of economic data in the US, with the core focus on the actual GDP for the third quarter set to be released on December 23, with market expectations for an annualized quarterly rate of 2.5%. The key focus of this data will be on the resilience of the service sector and non-durable goods consumption, whether it can maintain resilience from the overdrawn demand for durable goods due to "tariff panic" in the second quarter, and focusing on the differentiation among consumers. According to Bank of America Corp, although consumer spending in the second half of this year has remained stable overall, the top third of American households in income contributed more than half of the spending; about a quarter of households are running deficits. Jeffrey Roach, chief economist at LPL Financial, said, "The 'K-shaped' economy leads to a dispersion of consumer groups. The high-income class has a luxury lifestyle, and even can be said to be wealthy, while low-income families face high rents, rising levels of debt, and job instability." Perhaps this is another reason why inflation data released by the US Bureau of Labor Statistics on Thursday was so unexpected. November's CPI showed an overall increase in prices by 2.7% over the past 12 months, much lower than expected. Bill Adams, chief economist at Comerica Bank, said this data should give the Federal Reserve more confidence to cut rates again next year, and on this basis, aggregate 75 basis points of rate cuts in 2025. Adams said in an email, "The Federal Reserve will welcome the slowing overall and core CPI growth," as the report "strengthens the reasons for further rate cuts in 2026." Nevertheless, he said, "Consumers' perceptions of inflation may still be stronger than suggested by optimistic news headlines, as prices of many essential goods, other than housing, continue to rise rapidly." Santa Claus Rally Traders have been waiting all year for the "Santa Claus rally", which covers the last five trading days of the year and the first two trading days of the new year, making it one of the best weekly trading windows in the market. Last Friday, market trends showed signs in line with historical expectations. The term "Santa Claus rally" was coined by the legendary figure Yale Hirsch, author of the Stock Trader's Almanac, referring to the phenomenon of stocks rising in the last five trading days of the year and the first two trading days of the new year. Data compiled by CFRA Research shows that since 1945, the S&P 500 index has averaged a 1.5% increase in December, second only to November. It is worth noting that large tech stocks have also performed well. Oracle Corporation(ORCL.US) has fallen nearly 40% since its peak in September due to market concerns about its artificial intelligence promises. Last Friday, there were reports that Oracle Corporation would lead a group of US partners to acquire TikTok from its ByteDance, resulting in a more than 7% increase in Oracle Corporation's stock price. Last Friday, it was reported that the Trump administration was reviewing chip manufacturing giant NVIDIA Corporation(NVDA.US)'s plan to sell H200 chips to Chinese buyers, boosting NVIDIA Corporation's stock price. After Micron Technology, Inc.(MU.US) released its earnings report last week, its stock price rose by more than 10%, easing investors' concerns about artificial intelligence and the entire market as the last few trading days of 2025 approach. Analysts point out that soft US labor market data, unexpected declines in US inflation data, and the nominally dovish stance of the Federal Reserve have provided support for stock prices. Although the Federal Reserve has almost given the green light for the Santa Claus rally, concerns about overvaluation continue to suppress the market from reaching historical highs. However, most Wall Street strategists remain optimistic about the market outlook for next year, and the favorable economic and profit environment also provides investors with enthusiasm outside of artificial intelligence trading, which has become a "crutch" for many investors in the past few years. Wall Street strategists believe that loose monetary and fiscal policies, coupled with artificial intelligence trading, are the reasons for the stock market's rise next year. Analysts at Goldman Sachs Group, Inc. wrote in a client report, "2025 is a good example of the early optimistic stage of the macroeconomic cycle, where many stock markets... valuations rise with earnings growth. We believe the optimism will continue into 2026." Goldman Sachs Group, Inc. analysts forecast that earnings growth for the S&P 500 index in 2026 will exceed 12%, primarily due to strong growth of the top seven tech giants in the index. In a report to clients on Thursday, UBS Group AG's global wealth management company wrote, "Taking into account individual stocks, we believe the overall outlook for artificial intelligence remains positive. We see no signs of an investment bubble, and overall corporate fundamentals remain robust." The company predicts that by the end of 2026, the S&P 500 index will rise to 7700 points, a 13% increase from last Friday's level.