The Artificial Rally: How AI and Policy Are Rewriting the Santa Claus Rally

Investing.com • Dec 25, 2025 1:43pm (New York) •By Timothy Fries

The Artificial Rally: How AI and Policy Are Rewriting the Santa Claus Rally

The stock market enters the Santa Claus Rally period (Dec 24-Jan 5) with historically positive returns in 75% of years since 1928. However, the 2025 rally may be artificially driven by massive AI capital commitments and government-corporate partnerships rather than genuine economic strength. While a second consecutive year without the Santa Claus Rally would be statistically anomalous, underlying economic weakness—including contracting manufacturing, weak job growth, and rising bankruptcies—suggests the market gains are primarily fueled by Big Tech momentum and self-reinforcing capex cycles rather than economic optimism.

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Insights

USAR positive

Strategically acquired UK-based metals expertise, has significant cash position, and is positioned as a critical second source for defense-grade rare earth materials

NVDA positive

Highlighted as the first company to cross $5 trillion valuation; central to the AI capex flywheel driving market gains through continuous chip upgrades and data center investments.

Keywords

#Santa Claus Rally #AI bubble #capital expenditure #tech sector #manufacturing contraction #tariffs #Federal Reserve rate cuts

Tickers

NVDA MSFT GOOG GOOGL AMZN ORCL PLTR

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