Stock Market Faces Year-End Anxiety Ahead of Fed Minutes Release

NEW YORK, Dec. 28, 2025 — With U.S. stock exchanges closed for the holiday weekend, investors are bracing for the final trading sessions of the year while questioning the potential for a “Santa Claus rally”. The Dow Jones Industrial Average (DJIA) closed flat on Friday, sliding 20.19 points to 48,710.97, while the S&P 500 and Nasdaq saw slight declines as well.

This year has seen the DJIA and other major indexes approach all-time highs, fueled by a late-December surge. Analysts are keenly observing whether the holiday week will continue this trend or if the thin trading environment will exacerbate market volatility, as noted by Ryan Detrick, chief market strategist at Carson Group.

“A very strong five-day rally suggests that there is still upward bias in the early part of the Santa Claus period,” Detrick stated, highlighting historical patterns that show a typical rally over the last five trading days of December and the first two of January.

Trading volumes have diminished significantly, with just 10.22 billion shares exchanged on Friday compared to the 20-day average of 15.98 billion shares. Such low liquidity often characterizes holiday trading, where smaller market movements can have larger impact.

According to analyst Adam Turnquist at LPL Financial, data shows that since 1950, the S&P 500 has averaged a 1.3% return during this timeframe, achieving positive outcomes about 78% of the time. However, he cautions that these seasonal patterns are not foolproof, as substantial factors like earnings or economic shifts can overshadow them.

Investors are also anticipating the release of the Federal Reserve minutes from its December meeting, which may provide insight into future interest rate movements. Michael Reynolds, vice president of investment strategy at Glenmede, stated that the minutes could clarify the central bank’s stance as investors speculate about upcoming rate cuts.

As the DJIA stands near record levels entering the last stretch of 2025, analysts are warning that the combination of low liquidity and year-end adjustments could lead to increased volatility. Observers are now looking to see how market leadership may expand beyond dominant tech names into other sectors.

With impending economic data coming this week, including housing and labor statistics, markets remain focused on their potential impact on investor sentiment. The final read on the Dow futures after Sunday evening’s reopening will shed light on market expectations as 2026 approaches.