U.S. equities began the holiday week with a mild bid, but the real story is concentration risk and thin liquidity. Sunday night, Dow futures rose about 0.2%, S&P 500 futures gained 0.2%, and Nasdaq 100 futures climbed 0.3% as traders looked for a late-December tailwind. The S&P 500 and Nasdaq finished last week up 0.1% and 0.5%, respectively, while the Dow fell 0.7%, snapping a three-week streak.
The catalyst is a renewed appetite for rate-sensitive growth after cooler inflation revived the narrative of easier policy in early 2026. In premarket Monday, futures pointed higher again, with the Nasdaq 100 up 0.6% and the S&P 500 up 0.4% in thin trade. Meanwhile, gold extended its melt-up: gold futures rose 1.3% to $4,446/oz, reflecting how quickly “lower rates later” turns into “buy non-yielding hedges now.”
AI-linked megacaps remain the swing factor. Traders noted a resurgence in AI names after underperformance. CNBC highlighted Oracle as a laggard that jumped after a TikTok U.S. sale agreement involving a new joint venture that includes Oracle and Silver Lake. Nvidia also rebounded, reinforcing the idea that leadership may be narrowing back to the same cohort that drove much of 2025.
- Santa Claus rally math: the seven-session window runs from Dec. 24 through Jan. 5, and historically the S&P 500 averages a 1.3% gain over that span.
- Liquidity reality: the NYSE closes early Wednesday at 1 p.m. ET and is closed Thursday, increasing the odds of outsized moves on modest flows.
Year-end action is likely to be more about positioning than fundamentals. If tech continues to stabilize while yields don’t spike, the path of least resistance is higher, but fragile breadth means any rate shock can flip sentiment fast.
