wall street

There’s something about December that seems to charm equity markets into a year-end flourish.

For decades, investors have noted how the final month of the calendar tends to bring tidings of green screens and positive returns, fuelling what has become known as the Santa Claus rally.

But behind the festive metaphor lies a consistent, data-backed pattern.

Over the past four decades, the S&P 500 has gained in December about 74% of the time, with an average monthly return of 1.44% –– second only to November.

This seasonal cheer is echoed across European markets, with some indices showing even stronger performances.

Since its inception in 1987, the EURO STOXX 50, the region’s blue-chip benchmark, has posted an average December gain of 1.87%. That makes the Christmas period the second-best month of the year after November’s 1.95%.

More striking, however, is its winning frequency. December closes in positive territory 71% of the time — higher than any other month.

The best December for the index came in 1999, when it surged 13.68%, while the worst was in 2002, when it fell 10.2%.

Rally gathers steam in late December

Zooming in on country-level indices further reinforces the seasonal trend.

The DAX, Germany’s flagship index, has shown an average December return of 2.18% over the past 40 years, trailing only April’s 2.43%. It finishes the month higher 73% of the time, again tying with April for the best track record.

France’s CAC 40 follows a similar pattern, gaining on average 1.57% in December with a 70% win rate, also ranking it among the top three months.

Spain’s IBEX 35 and Italy’s FTSE MIB are more moderate but still show consistent strength, with December gains of 1.12% and 1.13% respectively.

But the magic of December doesn’t usually kick off at the start of the month. Instead, the real momentum tends to build in the second half.

According to data from Seasonax, the EURO STOXX 50 posts a 2.12% average return from 15 December through year-end, rising 76% of the time.

The DAX performs similarly, gaining 1.87% on average with a 73% win rate, while the CAC 40 shows even stronger second-half returns of 1.95%, ending positive in 79% of cases.

What’s behind the rally? It’s not just Christmas spirit

So what exactly drives this December seasonal phenomenon? Part of the answer lies in fund managers’ behaviour.

Christoph Geyer, an analyst at Seasonax, believes the rally is closely tied to the behaviour of institutional investors. As the year draws to a close, many fund managers make final portfolio adjustments to lock in performance figures that will be reported to clients and shareholders.

This so-called “price maintenance” often leads to increased buying, especially of stocks that have already done well or are poised to benefit from short-term momentum.

This behavioural pattern gains importance in years when indices such as the DAX trade within a sideways range — as has been the case since May this year. A sideways market is one where asset prices fluctuate within a tight range, lacking a clear trend.

According to Geyer, a breakout from this sideways range for the DAX appears increasingly likely as December kicks in.

From mid-November to early January, historical patterns suggest a favourable outcome, with a ratio of 34 positive years versus 12 negative for the German index — and average gains exceeding 6% in the positive years.

While past performance does not guarantee future returns, December’s track record across major global and European indices provides a compelling narrative for investors.

In short, December’s strength is not just about festive optimism. It’s a convergence of seasonal statistics, institutional dynamics, and technical positioning.

Disclaimer: This information does not constitute financial advice, always do your own research to ensure investments are right for your specific circumstances. We are a journalistic website and aim to provide the best guidance from experts. If you rely on the information on this page, then you do so entirely at your own risk.

Global stocks rose on Thursday after strong Nvidia results eased concerns of a market crash, linked to the perceived overvaluation of AI firms.

Bitcoin, the world’s most established cryptocurrency, also enjoyed a modest lift — rising 0.73% by early afternoon in Europe.

This comes after a hard few months for the token. On Monday it briefly slipped below the $90,000 mark for the first time in seven months before rising to around $91,800 on Thursday.

A turning point in crypto’s trajectory can be traced back to 10 October, when a meltdown wiped out more than $1 trillion in market value across all tokens. More than $19 billion of leveraged crypto positions were offloaded, notably after US President Donald Trump threatened new tariffs on China.

“There have been several catalysts (of the recent price drop), but it seems as if the biggest drivers are long-term selling by ‘OGs’, an uncertain economic climate, and a mass deleveraging event on the 10th October,” Nic Puckrin, CEO of Coin Bureau, told Euronews.

“OGs are the term used to describe older Bitcoin holders with massive amounts of Bitcoin. They have been selling for several weeks which has led to a flood of supply hitting the market,” he added.

Analysts note that the US economy is in a period of deep uncertainty at the moment, partly as a government shutdown has prevented the publication of key data releases, with the uncertainty driving crypto lower.

The outcome of the Federal Reserve’s next interest rate decision, due in December, is hanging in the balance — with investors now paring back expectations of a cut.

Transcripts released this week from the Fed’s October meeting show the policy-setting committee deeply divided over whether to reduce the benchmark interest rate.

“Bitcoin is increasingly driven by macro moves,” Puckrin argued.

Analysts fear that as crypto grows more interconnected with mainstream financial markets, contagion will make both crypto assets and stock markets more volatile.

‘A football match with no referee’

Bitcoin reached its price high in October thanks to increased institutional acceptance, expectations of Fed rate cuts, and support from the Trump administration.

For Carol Alexander, crypto expert and finance professor at Sussex University, Bitcoin’s volatility must nonetheless be associated with aggressive trading techniques — rather than simply pointing to the macro environment.

“Bitcoin’s price is determined primarily by the behaviour of professional traders operating on offshore, unregulated trading platforms. These are not hobbyist investors; they are major hedge funds and specialised trading firms,” she told Euronews.

“On these offshore crypto exchanges, professional traders can deploy aggressive order-book strategies — sometimes labelled spoofing or laddering … Their business model relies on generating sharp volatility. They do not care whether the price rises or falls; they care only that it moves quickly.”

In other words, these traders make money from price swings by buying in the dip and selling when crypto rebounds, meaning they aren’t focused on long-term holdings.

The losers in this scenario are often non-professional traders, who can sometimes take on enormous leverage — borrowing money to increase the size of their investments. When the market moves against these investors, they are often forced to sell, losing everything.

“When too many of these non-professional traders have been wiped out, liquidity dries up, and the pros step back,” said Alexander. “At that point, the price often rebounds sharply, encouraging new entrants to join. The whole system behaves like a football match played in a stadium with no referee.”

Puckrin also predicted that crypto is set for a rebound, forecasting that it won’t fall much below current levels.

“I still think it’s a bright future despite the price action. Crypto has been through multiple cycles and it always emerges stronger. We are also seeing the mainstreaming and institutionalisation of the industry. This means more people can use the technology in their daily lives.”

European markets opened significantly lower on Friday, following a retreat in Asian shares in the morning and Wall Street’s tumble on Thursday, as investors reassessed the outlook for interest-rate cuts and questioned the lofty valuations of leading US technology and AI stocks.

“Markets are down across the board as investors fret about cracks in the narrative that’s driven the mother of all tech rallies over the past few years,” said Dan Coatsworth, head of markets at AJ Bell. The key concern is “about rich equity valuations and how billions of dollars are being spent on AI just at a time when the jobs market is looking fragile”, he added.

In Europe, sentiment was gloomy on Friday morning as UK government bond yields jumped following reports that Chancellor Rachel Reeves has abandoned plans to raise income tax rates in this month’s Autumn Budget. The ten-year gilt yield climbed above 4.54% before easing slightly. If confirmed, the chancellor’s move — first reported by the Financial Times — would leave a shortfall in the public finances.

London equities weakened, with bank shares among the worst performers on the FTSE 100 as investors digested the prospect of a tighter fiscal backdrop.

By around 11:00 CET, the FTSE 100 was down more than 1.1%, the European benchmark Stoxx 600 had lost nearly 1%, the DAX in Frankfurt dipped more than 0.7% and the CAC 40 in Paris fell nearly 0.7%. The Madrid and Milan indexes were down 1.2% and 1% respectively.

“Despite the doom and gloom, the scale of the market pullback wasn’t severe enough to suggest widespread panic,” said Coatsworth, adding that “a 1% decline in the FTSE 100 is not out of the ordinary for a one-day movement when markets are feeling grumpy”.

On the corporate front, luxury group Richemont was among the best performers, soaring 7.5% after beating forecast first-half results. Siemens Energy jumped more than 10% after the company raised its targets for the 2028 financial year. In other news, French Ubisoft delayed its financial report for the past six months; trading in its shares was suspended after an earlier drop of more than 8%.

Across the Atlantic, Wall Street endured one of its weakest sessions since April on Thursday, with the S&P 500 sliding 1.7% and the Dow Jones Industrial Average falling 1.7% from its record high set a day earlier. The tech-heavy Nasdaq dropped 2.3%.

Shares in major AI-linked companies came under heavy selling pressure, with Nvidia down 3.6%, Super Micro Computer off 7.4%, Palantir falling 6.5% and Broadcom losing 4.3%. Oracles lost more than 4%.

The sector’s extraordinary gains this year have prompted comparisons with the dot-com boom, fuelling doubts about how much further prices can rise.

Expectations for a further US interest-rate cut in December have also diminished, with market pricing now suggesting only a marginal chance the Federal Reserve will move again this year.

Asian markets mirrored the downbeat tone as fresh data showed China’s factory output grew at its slowest pace in 14 months in October, rising 4.9% year on year — down from 6.5% in September and missing expectations. Fixed-asset investment also weakened, dragged down by ongoing softness in the property sector.

South Korea’s Kospi led regional losses, tumbling 3.8% amid heavy selling of technology shares. Samsung Electronics dropped 5.5% and SK Hynix slid 8.5%, while LG Energy Solution lost 4.4%. Taiwan’s Taiex declined 1.8%.

Japan’s Nikkei 225 shed nearly 1.8%, reversing Thursday’s gains, with SoftBank Group plunging 6.6%. In China, Hong Kong’s Hang Seng fell 2% and the Shanghai Composite slipped 1%.

Meanwhile, oil prices strengthened. Brent crude rose nearly 1.6% to $63.99 a barrel, and West Texas Intermediate added 1.8% to $59.76. The dollar was slightly firmer at ¥154.55, while the euro traded at $1.1637.