And similar to that… December is upon us.
It has been a risky handover from November with U.S. main indices underperforming, dragged down by steep declines for the Nasdaq. Europe’s Stoxx 600 managed to carry onto positive factors, making November the fifth optimistic month in a row. However tech shares additionally suffered, as considerations over AI valuations and spending plans performed out throughout world inventory markets.
So what does this imply for December — can shares stage a seasonal Santa Rally, or will or not it’s extra ‘bah humbug’ within the closing buying and selling month of the 12 months?
Macy’s Santa Claus is greeted by merchants on the ground on the New York Inventory Alternate (NYSE) in New York Metropolis, U.S., Nov. 26, 2025.
Brendan Mcdermid | Reuters
The case for a Santa Rally
Constancy Worldwide crunched the numbers: The FTSE 100 has delivered a optimistic return throughout December in 24 out of the final 30 years. There might be some festive cheer for the U.Okay. this 12 months, with markets pricing in a 90% probability the Financial institution of England will minimize the rate of interest in December after the price range was seen as avoiding any critically inflationary measures.
It is a totally different image for the European Central Financial institution, the place markets see zero probability of a minimize, however that is additionally seen as a optimistic signal because the governing council stated coverage is in a “good place” of their final set of minutes. European and Asian shares have tracked the U.S. larger every time expectations rise for a minimize on the subsequent Federal Reserve assembly in December, with a near-83% probability of a discount now anticipated by markets, in line with CME Fedwatch.
The central banks might assist carry the festive spirit this December.
The ‘bah humbug’ case
However there are market forces that would depart the bulls discovering a lump of coal of their stocking. The drivers behind the volatility in November haven’t magically disappeared, with some buyers and market watchers nonetheless voicing concern over the tempo of AI hyperscaler spending. Even the ECB made the standard transfer this week of warning that U.S. tech valuations are stretched as a result of buyers have FOMO, “worry of lacking out.” The central financial institution warned of “sharp correlated value changes” as a key danger for AI-driven shares.
Crypto is also a drag within the closing month of the 12 months. As CNBC reported final week, Compass Level predicts bitcoin will proceed declining as newer buyers promote the token and exchange-traded-funds tied to it. Compass additionally suggests long-term holders might promote down their holdings because of the “halving” schedule, which occurs each 4 years and “programmatically cuts in half the quantity of rewards people get for mining new tokens on the bitcoin blockchain.”
Why the stress on bitcoin might linger into year-end
Whether or not you imagine within the Santa Rally or not, December will cap an enchanting 12 months for asset lessons throughout the globe, and make 2026 predictions robust to name.
World occasions in December:
December 10: Federal Reserve coverage resolution
December 11: Swiss Nationwide Financial institution coverage resolution
December 18: Financial institution of England coverage resolution
December 18: European Central Financial institution coverage resolution
December 19: European Leaders summit in Brussels
