Good morning, investors. Inflation data is due this morning.

Wall Street expects the headline CPI number to show a 3.1% gain compared to a year ago, while the core number, which strips out energy and food, is seen at the same level.

This will also mark the final key piece of economic data we get for the year — but that shouldn’t be a concern for asset prices.

It would be very unusual for stocks to have already notched their high for the year by the middle of December, according to history.

Dating back to 1980, the S&P 500 has finished the year at its annual peak in December 53% of the time. But in those instances, the highs have come in the last week of the year 82% of the time.

Zooming out to the last 75 years confirms the same pattern.

Most of the gains in December tend to come in the second half of the month, lining up with the so-called Santa Rally that unfolds over the last five trading days of the year and the first two of January.

“No month is more likely to be higher and when 2025 is said and done, we think the S&P 500 has a good chance of seeing gains the second half of this month,” said Ryan Detrick, chief market strategist for Carson Group.

Separate seasonal trends of the last four decades also point to higher asset prices over the next two weeks, as DataTrek Research highlighted in a note to clients:

“We will know for sure in just 10 trading days, over which time the index needs to rally 1.5 percent to print a new record close,” DataTrek co-founders Nick Colas and Jessica Rabe said.

Indeed, December is the third-strongest month of the year on average.

This historical set up arrives just as the market’s internal health is improving.

The recent push to new highs has been broad-based, with small-cap stocks and the equal-weighted S&P 500 rallying alongside the usual suspects across Big Tech.

That breadth implies healthy participation, not narrow and exhausted leadership.

Meanwhile, the Federal Reserve also seems to be providing a boost.

Last week’s rate cut came with the S&P 500 within 2% of a record high, a combination that has pushed stocks higher 12 months later 100% of the time with an average return of double-digits.

So while the first half of December has been mixed, this ultimately tracks with the long-term seasonal pattern where positive returns compress into the latter weeks.

That leaves investors with a bullish trifecta:

On balance, the bulls seem to have momentum on their side heading into 2026.

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📉AI stocks dragged the Nasdaq lower. The tech-heavy index joined the S&P 500 in notching their weakest days in nearly a month on Wednesday. Alphabet, Nvidia and Tesla all dropped more than 3%.

👀 A Nvidia board member sold $44 million in shares. Harvey Jones has served as a director since 1993, and he disposed of 250,000 shares this month at an average price of $177.33 per share. He still owns more than 7 million shares. (Reuters)

📊 Micron stock whipsawed on blowout earnings. The chip company saw its shares rise as much as 7% before pulling back following its earnings beat. Micron is one of only three major suppliers for high-bandwidth memory chips, essential for AI. (Yahoo Finance)

🗓December 18, 2013: The Fed announced the start of a “tapering” to quantitative easing and reduced the pace of its bond purchases. It marked the first step in winding down its financial crisis-era decisions. 

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter and host our show, Full Signal, to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

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