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Stocks closed out 2025 on a down note, with all three main market indexes notching modest losses on Wednesday. Still, stocks logged a third straight year of double-digit percentage gains, which is nothing short of impressive given the extreme volatility the equities market endured.
“Describing 2025 as ‘resilient’ might be an understatement,” says LPL Chief Financial Strategist Adam Turnquist. “The economy showed remarkable strength by overcoming higher inflation, a slowing labor market, fewer rate cuts than originally expected, and a sharp rise in the effective tariff rate.”
And this strength was seen in the stocks, too. Indeed, the equities market came within an inch of bear-market territory this spring following the turmoil sparked by President Donald Trump’s tariff policies, but quickly recovered to trade back at new record highs.
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Helping things along were strong corporate earnings and a resilient consumer. Indeed, companies “consistently delivered double-digit earnings growth quarter after quarter and maintained record-high profit margins, reflecting strong fundamentals and adaptability to policy shocks,” says Turnquist. “Meanwhile, consumers stayed robust, continuing to spend actively despite tariff uncertainties and elevated prices.”
And Wells Fargo Investment Institute Senior Global Equity Strategist Scott Wren is optimistic about the year ahead. “We believe the next 12 months will favor U.S. equities, based on our expectations for higher U.S. GDP, broadening & accelerating earnings growth, moderating inflation and improved global growth.”
Among the catalysts that Wren believes will keep the wind at the market’s back are strong capital expenditures from tech companies, deregulation, tax refunds from the One Big Beautiful Bill Act and more rate cuts from the Fed.
Will Santa Claus fail to call?
But for today, the price action was to the downside. At Wednesday’s close, the S&P 500 was off 0.7% at 6,845, the Nasdaq Composite was 0.8% lower at 23,241, and the Dow Jones Industrial Average shed 0.6% to 48,063.
With today’s loss, the S&P 500 is now down 0.9% since the December 23 close – the official start of this year’s Santa Claus Rally.
“If Santa Claus should fail to call, bears may come to Broad and Wall,” wrote Yale Hirsh in the 1972 edition of the Stock Trader’s Almanac. According to Hirsch, the “Santa Claus Rally” encompasses the last five trading days of the year and the first two of the new year.
Since 1950, the S&P 500 has averaged a return of 1.3% over this time frame. According to LPL’s Turnquist, positive returns during this seasonal time period have resulted in an average January gain of 1.4% and a full-year return of 10.4%.
But negative returns have corresponded with an average January loss of -0.1% and a more modest annual return of 6.1% since 1950.
Nike gets a boost from board members’ trades
Nike (NKE) rose 4.1% after regulatory filings revealed several insiders bought the dip on the beleaguered blue chip stock.
Shortly before Christmas, Apple (AAPL) CEO Tim Cook, who is a Nike board member, doubled his stake in the athletic apparel and footwear maker.
And Form 4 filings from December 30 reveal that Nike CEO Elliott Hill and board member Robert Holmes Swan also bought shares of Nike to end the year.
It’s been a tough stretch for Nike, which finished 2025 down 15.8% – making it the third-worst Dow Jones stock of the year, behind UnitedHealth Group (UNH) and Salesforce (CRM).
But Wall Street is keeping the faith. Of the 20 analysts covering NKE who are tracked by S&P Global Market Intelligence, 20 say it’s a Strong Buy, five have it at Buy, 12 rate it a Hold and two have it at Sell or Strong Sell. This works out to a consensus Buy recommendation.
And analysts’ average 12-month price target of $77.24 represents implied upside of more than 20% to current levels.