**U.S. GDP Sparks Santa Claus Rally Speculation Amid Trading Volatility**
A better-than-expected reading of the fourth-quarter gross domestic product (GDP) is fueling optimism for a potential Santa Claus rally in U.S. markets. Investors remain uncertain about this rally’s formation due to thin trading volume, with a clearer picture anticipated next week as markets observe upcoming economic indicators.
Despite investor optimism, concerns around tariffs, inflation, job markets, and an AI stock bubble persist, stressing the importance of consumer strength as a key determining factor looking ahead to 2026. Notably, the S&P 500 continues to reach new highs, while the Russell 2000 small-cap index shows signs of outperforming larger stocks, suggesting a shift in market dynamics as investors may rotate out of big-tech investments.
