Christmas Cheer Could Be in Store for the S&P 500 Index

Subscribers to Chart of the Week received this commentary on Sunday, Dec., 21.

There has been no shortage of noise from markets as we approach Christmas. This past week, a mix of Big Tech volatility and economic data dragged the Dow Jones Industrial Average (DJI) and S&P 500 Index (SPX) to three consecutive losses, with Oracle’s (ORCL) AI-triggered drawdown and subsequent recovery in response to blockbuster earnings from Micron Technology (MU) playing a part. That bounce was touch-and-go on Friday, but the Nasdaq Composite (IXIC) and SPX managed to eke out weekly wins.

So what should we expect next week, with only a handful of trading days left before 2026? While the earnings well has run dry, there will be a few delayed economic reports to unpack, including gross domestic product (GDP) data for the third quarter. We could be looking at a historically impressive week, per data from Schaeffer’s Senior Quantitative Analyst Rocky White, as the Friday after Christmas often turns out to be the real star on the tree.

Since 1950, the SPX has seen 75 Christmas week returns. Of those 75, the index has averaged a weekly return of 0.55%, ending positive almost 70% of the time. Compared to an all-time weekly return of 0.17% for the benchmark, Christmas week gains could me imminent. Narrowing it down even further, this year Christmas falls on a Thursday. This has occurred only nine other times since 1950, but the Friday after the holiday averages return rate of 0.46%, with the SPX finishing higher every time.

If you are looking for a more specific rundown of which individual stocks are on the naughty list, don’t worry, we’ve got you covered! White pulled a list of the 25 worst stocks to buy during Christmas week going back 10 years. While weighing the risk-reward ratio for most stocks is never a guaranteed safeguard, the top two names on the list below get as close to it as possible.

CME Group (CME) takes the top spot as the worst performer. What’s more, the security hasn’t beaten the SPX returns during Christmas week in at least a decade. The finance market operator is joined by Old Dominion (ODFL), the only other stock that has remained 100% unsuccessful in beating the SPX during Christmas week in the last 10 years.

Not only is CME unsuccessful, but it averages a weekly drop of 1%, positive just 30% of the time. CME Group stock has been struggling to find its footing on the charts, up 16% in 2025 but down 4% for December. On the weekly chart, CME has failed to maintain any breakouts above $280, while the 10-week moving average has also begun to add pressure.

There is room for downgrades, with eight covering brokerages sporting a "buy" or better rating. Should this bullish sentiment begin to unwind, the equity could face even more headwinds.

Now could also be an affordable time to bet on the stock's next move with options, as its Schaeffer's Volatility Index (SVI) of 18% sits higher than just 14% of readings from the last year. And with a Schaeffer's Volatility Scorecard (SVS) of nine out of 100, the security has consistently realized lower volatility than its options have priced in, meaning a premium-selling strategy could be an ideal opportunity for options traders.