The stock market enters the final sprint phase of 2025: This week, pay attention to these key signals.

As 2025 comes to a close, the US stock market hovers near record highs. As of December 19, the S&P 500 index closed at 6,774.76 points, just a step away from its historical peak.

Last week, the market experienced a trend of first declining and then rising. At the beginning of the week, it was under pressure due to concerns about spending related to artificial intelligence, and then rebounded driven by lower-than-expected inflation data and strong tech earnings.

01 Latest Market Trends

The last complete trading week of 2025 has come to a close. In the week of December 19, the main U.S. stock indices rebounded, with the S&P 500 index rising by 0.9% and the Nasdaq Composite showing an even stronger performance, increasing by 1.3%.

The recovery of market sentiment is mainly due to the combination of two favorable factors.

Lower-than-expected inflation data has strengthened market expectations for future interest rate cuts by the Federal Reserve. The U.S. consumer price index in November increased by 2.7% year-on-year, and the core CPI rose by 2.6% year-on-year, both below market expectations.

Secondly, the strong performance of technology stocks, especially those related to artificial intelligence, has boosted market confidence. Micron Technology released an optimistic financial forecast due to the surge in AI demand, with its stock price soaring more than 10% in a single day.

02 Key Data and Event Analysis

Last week, the core events that affected the market were dominated by inflation data and the performance of technology companies.

The U.S. Labor Department's November CPI data shows that inflationary pressures have eased. Although the monthly rate data could not be released due to the government shutdown, the lower-than-expected annual rate data has been sufficient to boost market sentiment.

This data has strengthened investors' expectations that the Federal Reserve may further cut interest rates in 2026. According to the CME FedWatch tool, the market's probability of a rate cut in March 2026 has risen to 58%.

In the technology sector, Micron Technology's strong financial forecast has become the market focus. The company expects its earnings per share for the next quarter to be nearly double the market's expectations, highlighting the strong demand for artificial intelligence in the memory market.

At the same time, Oracle Corporation's stock price has also rebounded, reversing the previous decline caused by setbacks in its data center financing plans.

03 Differences in Industry Sector Performance

Last week, the market exhibited obvious sector rotation characteristics. The information technology, healthcare, and industrial sectors led the gains, while the utilities and consumer staples sectors lagged behind.

Semiconductor and artificial intelligence-related stocks performed particularly well. The Philadelphia Semiconductor Index rose sharply by 2.6%, reflecting the strong performance of AI and memory stocks.

Consumer stocks also performed well, with 6 of the 11 sectors in the S&P 500 index closing higher, led by the consumer discretionary sector with a gain of 1.78%.

It is worth noting that market breadth has improved. The ratio of advancing to declining stocks on the New York Stock Exchange reached 1.9 to 1, while the Nasdaq Exchange was 1.63 to 1.

04 Technical Analysis Perspective

From a technical analysis perspective, the major stock indices exhibit different pattern characteristics. The hourly chart of the S&P 500 index may be forming an inverse head and shoulders pattern, which is a bullish technical formation.

If the index can break through the resistance level of 6,850 points with volume, it may test the historical high of 6,930 points or even higher levels.

The downward trend of the Nasdaq index has temporarily stalled, with short-term movement returning to an upward channel. The main challenge for the bulls is whether they can break through the resistance level of 25,500 points.

The outlook for the Dow Jones Industrial Average is relatively unclear, as market observers are determining whether the recent trend is a range fluctuation or a double bottom pattern.

05 Year-End Special Market Phenomena

As the end of the year approaches, market participants begin to pay attention to the seasonal phenomenon known as the “Santa Claus Rally.” According to historical data, since 1928, the probability of the S&P 500 index rising in the last two weeks of December is as high as 75%, with an average increase of 1.3%.

Statistics from Castle Securities show that the so-called “Santa Claus Rally” usually refers to the last five trading days of the year and the first two trading days of January, during which the S&P 500 index can average a gain of 1.3%.

Goldman Sachs' trading team pointed out: “Unless there is a major shock, the current strong seasonal market and clearer position layout will be difficult to reverse.” They believe that there is still room for the market to rise from current levels until the end of the year.

The activity in the derivatives market also supports this optimistic expectation. Traders are buying a large number of call spread contracts linked to tech stocks such as Nvidia and Micron Technology, while selling put options, indicating confidence in limited downside potential.

06 Institutional Perspectives and Market Sentiment

Major financial institutions remain cautiously optimistic about the outlook for U.S. stocks. UBS Group maintains a positive outlook on U.S. stocks, predicting that the S&P 500 index could reach 6,600 points by the end of 2025.

Scott Cronin, a strategist at Citigroup, pointed out: “After the data drought caused by the government shutdown, the Fed's actions this week and several data releases provided some comfort for the potential soft landing scenario and further rate cuts in 2026.”

Retail investor sentiment remains high. According to data from Castle Securities, retail traders have continued to net buy call options on U.S. stocks for 32 out of the past 33 weeks, setting a record for the longest buying streak in the firm's history.

Institutional investors are also increasing their allocation to the stock market, particularly in sectors outside of the tech giants. Real estate and industrial stocks, which are sensitive to the economy, have issued the strongest buy signals for the second consecutive week.

07 Key Points of Interest This Week and Interaction with the Gate Platform

As trading enters its final phase in 2025, investors should closely monitor several key areas. Market volatility may be exacerbated by the “quadruple witching day,” which is the day when options and futures contracts expire.

In terms of economic data, consumer confidence and inflation expectations are worth paying attention to. In addition, geopolitical developments and speeches from Federal Reserve officials may also affect market sentiment.

For users of the Gate platform, the dynamics of traditional stock markets often correlate with those of the cryptocurrency market. The performance of tech stocks, particularly the movements of companies related to artificial intelligence, may influence the sentiment of related crypto assets.

Investors on the Gate platform can pay attention to tokens related to AI, cloud computing, and big data, as these areas have a strong correlation with traditional tech stocks. At the same time, changes in market risk appetite may also transmit between the traditional stock market and the crypto market.

Please note that the traditional stock market data and events mentioned in this article are based on publicly available information. The token prices on the Gate platform should be based on the latest real-time data as of December 22. Investors should consider multiple factors and carefully assess risks before making any decisions.

Future Outlook

As the S&P 500 index closed on December 19 just a step away from its all-time high, the market's technical pattern suggests the possibility of forming a bullish inverse head and shoulders pattern.

Traders are buying a large number of call options on technology stocks, with retail investors net buying call options on US stocks for 32 out of the last 33 weeks, setting a record. These actions suggest that market participants have confidence in the year-end market.

Historical data shows that in 75% of cases, the market rises in the last two weeks of December. This phenomenon, known as the “Santa Claus Rally,” combined with lower-than-expected inflation data and strong AI demand, could end the stock market on a positive note for 2025.