Is the Santa Rally Real?
We checked using 42 years of data
The final stretch of the calendar year is often referred to as the “Santa rally.”
Using S&P 500 data spanning 42 years, we analyzed how the market behaves in:
The second-to-last week of the year
The final week of the year
The combined two-week window
And compared all of it to a normal (baseline) week
Start With the Baseline
Over the full dataset, the average S&P 500 week looks like this:
Win rate: ~57%
Average return: ~+0.20%
That’s your benchmark. Any seasonal edge needs to beat this to matter.
The Second-to-Last Week Is Where the Edge Begins
The second-to-last trading week of the year stands out immediately:
Win rate: ~64%
Average return: ~+0.57%
That’s a material improvement over a normal week, both in reliability and magnitude.
This is the week that does the heavy lifting for year-end performance.
The Final Week Is Overrated
By contrast, the final trading week on its own is far less impressive:
Win rate: ~52%
Average return: ~+0.37%
The Real Opportunity Is the Two-Week Window
When you combine the second-to-last week and the final week into a single two-week return, the picture sharpens dramatically:
Win rate: ~64%
Average return: ~+0.93%
Best outcome: +8.3%
Worst outcome: −4.9%
This window:
Matches the strong win rate of the better week
Nearly quintuples the average return of a normal week
Captures the full effect of year-end positioning and flow continuity
So is the Santa Rally Real?
Based on four decades of data:
The “Santa rally” is not a one-week event. It’s a two-week window and the rally starts earlier than most people think.
The second-to-last week provides the reliability.
The final week completes the move.
Together, they meaningfully outperform a normal week.