There are precious few trading days left in 2025. If history is your guide — and you share the cheery disposition of the season’s round-bellied, red-cheeked representative — you might be in luck.

Signs of the year-end, so-called Santa Claus rally may have emerged late last week amid investors’ concern that a rough December would leave them with the proverbial coal in their stock holdings this Christmas.

A Data Assist

First observed by Stock Trader’s Almanac founder Yale Hirsch in 1972, the Santa Claus rally refers to a phenomenon generally held to occur on the last five trading days of December and the first two trading days of January. The S&P 500 has posted an average gain of 1.3% during this seven-day period since 1950. (Slightly different dates have also been proposed for capturing the rally: Data tallied by Citadel Securities shows that, in the last two weeks of December, the index has gained 75% of the time since 1928, also rising by an average 1.3%).

As with the physics of Santa himself — come on, a sled weighed down by all those presents isn’t getting airborne — there’s no ultimate agreement about why this happens. Some suggest the cause could be lower trading volumes as institutional investors and fund managers are on holiday; others point to end-of-year portfolio rebalancing; and others still attribute the Santa Claus rally to investors simply adopting a cheerful holiday spirit. Scrooge, the miserly protagonist of Charles Dickens’ A Christmas Carol, had his moments last week, however:

• A four-day losing streak for the S&P 500 temporarily put the index into negative territory for December, until it was broken by a 0.8% gain on Thursday. The advance continued with a 0.9% gain on Friday.
• “Barring any major shocks, it will be hard to fight the overwhelmingly positive seasonal period we are entering and the cleaner positioning set-up,” Goldman Sachs analysts wrote in a client note. To emphasize just “how positive” the holiday rally tends to be, Goldman noted that while the S&P’s mean return for the entire month of December since 1928 has been 1.98%, from just December 18 to 31, it has been 1.77%.

Getting Tech-nical: On top of the S&P 500’s 16.2% climb in 2025, banks are forecasting more gains and robust corporate earnings in 2026. While this has coincided with rotations out of tech stocks amid concerns about overheating in the AI sector, the tech industry got a shot in the arm heading into the Santa Rally period. Incomplete Labor Department data last week suggested inflation eased in November, clearing the path to more Federal Reserve interest rate cuts. The Roundhill Magnificent Seven ETF, which tracks the highest-performing tech megacaps, rose 0.8% on Friday.

Amid a withering downturn for the US electric vehicle industry, Rivian just delivered something rare: optimism.

The Irvine, California-headquartered EV manufacturer scored an upgrade last week from Baird analyst Ben Kallo, who changed his rating for the stock to “Buy” from “Hold” and raised his price target to $25 per share from $14. Kallo wrote that “2026 is the year of R2” — the company’s new midsize SUV. The automaker’s stock popped 15% Thursday following the news, ending the trading day up more than 50% for the year. On Friday, Wedbush raised its price target for Rivian to $25 per share from $16.

The increased price targets came just a week after Rivian announced it had developed its own artificial intelligence chip, making it less dependent on Nvidia, and that it was continuing its progress toward fully autonomous vehicles by expanding its hands-free driving feature. (Investors didn’t seem convinced the move would translate to growth, and the stock fell roughly 6.1% that day). A Dec. 18 update from the company says that tech improvements will allow drivers to take their hands off the steering wheel on more than 3.5 million miles of roads in the US and Canada, both on and off highways.

Slowdown Ahead

Rivian’s journey to self-driving comes as momentum for EVs has generally slowed amid the Trump administration’s recent proposal to ease Biden-era fuel economy requirements as part of a broader shift away from non-combustion-powered autos.

Other EV makers have also been taking hits:

• Last week, Ford Motor said it expects to take about $19.5 billion in charges, primarily related to its EV business. The automaker is pulling back from EVs and turning to gas and hybrid models that can actually turn a profit. “Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting,” Ford CEO Jim Farley told The Wall Street Journal.
• California’s Department of Motor Vehicles recently threatened to ban Tesla from selling its EVs for 30 days unless the company quits what regulators say are misleading marketing tactics.

Lawyering Up: Sixteen states and the District of Columbia are suing the Trump administration over what they say is the unlawful withholding of more than $2 billion in funding for EV chargers. “This is just another reckless attempt that will stall the fight against air pollution and climate change, slow innovation, thwart green job creation and leave communities without access to clean, affordable transportation,” California Attorney General Rob Bonta said in a statement.

Want to make your own app but have no idea how to code? All you need is love. Or, umm, Lovable.

At least, that’s the pitch of so-called “vibe coding” software-maker startup Lovable, which scored a $330 million raise last week at a $6.6 billion valuation. That’s triple the valuation of its raise in July, when it was already the fastest-growing software startup in history.

It’s All Just Vibes, Man

So what earned Lovable the “fastest-growing” title? After launching in November 2024, the company had reached $100 million in annual recurring revenue by the time of its $200 million raise at a $1.8 billion valuation in July. Last week, the company said it has since doubled that revenue. Lovable sells no-code or “vibe coding” tools, which can build entire websites and applications purely from user prompts — no software engineering or designing necessary.

The company offers a free option, as well as scaling subscription tiers for enterprise users; it is not yet profitable, according to The New York Times’ DealBook. Its raise puts it at the forefront of an emerging vibe-coding sector that aims to democratize the extremely lucrative process of software making — and it certainly has competition:

• A month ago, startup Cursor, which makes slightly more extensive AI tools for coders, raised $2.3 billion at a $29 billion valuation. Meanwhile, companies that build similar tools for amateurs include Replit (which scored a raise at a $3 billion valuation in September) and StackBlitz, which achieved a $700 million valuation in its last raise a year ago.
• In July, Google did a $2.4 billion acquihire of the executives at vibe-coding startup Windsurf; CapitalG, one of Alphabet’s venture capital arms, participated in last week’s Lovable raise. OpenAI and Anthropic, meanwhile, are selling AI coding tools directly.

Conversely, Lovable’s platform pulls from AI models developed by OpenAI, Anthropic, Google, and others, tapping each one depending on a user’s needs.

Brake Check: Despite the proliferation of AI code-generating tools, experts have been quick to warn that an overreliance on vibe coding can increase cybersecurity risks. We’re picking up bad vibrations.