Analysis from Fidelity International reveals the FTSE 100 has delivered a positive December return in 24 of the past 30 years, and the S&P 500 in 22.
With the festive season around the corner, investors are once again wondering whether the so-called ‘Santa Rally’ will fill their portfolios with Christmas cheer.
The ‘Santa Rally’ refers to the tendency for stock markets to rise in the final stretch of the year – typically spanning the last week of December and the first two trading days of January. Often fuelled by festive optimism, holiday spending, year-end portfolio tidying, and lighter trading volumes, it’s the time when investors hope markets will wrap up the year on a high.
New analysis from Fidelity International (“Fidelity”), spanning three decades of market data (1995-2024), shows that December has historically been a strong month for global equities.
Three decades of festive cheer
Looking back over the past 30 years, the FTSE 100 has delivered a positive December return in 24 out of 30 years, while the S&P 500 has risen 22 times.
The strength of the Santa Rally has often shone through even in difficult periods. In 2008, at the height of the global financial crisis, both markets still managed to post gains. In 2016, following the UK’s Brexit referendum, the FTSE benefited from a weaker pound, which boosted exporters and lifted market sentiment. In 2021, markets pushed higher despite lingering Covid-related uncertainty, as economies reopened, and corporate earnings rebounded.
December returns for the FTSE 100 and S&P 500 (1995-2024)
Yet not every year has delivered a sparkling performance. Last year bucked the festive trend, with both the FTSE 100 and S&P 500 ending December lower as investors grappled with persistent inflation pressures, uncertainty over the timing of interest rate cuts and concerns about global growth – all of which weighed on year-end optimism.
FTSE 100 & S&P 500 Total Return
| FTSE 100 | S&P 100 | |
| Positive Decembers 1995-2024 | 24 | 22 |
| Negative Decembers 1995-2024 | 6 | 8 |
Jemma Slingo, Pensions and Investment Specialist, Fidelity International comments: “Seasonal patterns like the Santa Rally are no substitute for a long-term investment plan, but they do offer an insight into how investor psychology can drive markets. Optimism tends to build as the year draws to a close and investors look ahead with a sense of renewal in the new year. Even in times of uncertainty – whether it’s financial crises, referendums or pandemics – December has often rewarded those who stayed invested rather than trying to time the market”
The UK picture
It is not just the frequency of Santa Rallies that stands out – December returns also tend to be stronger than average, particularly in the UK. Over the past 20 years, the FTSE All-Share has achieved month-on-month growth of 2.1% in December, compared with an average of 0.3%. Returns have also proved less variable than in any other month of the year. April remains the only month to have produced higher average gains, potentially helped by flows around the beginning and end of the tax-year and company earnings reports.
UK shares have a habit of rising in December
Source: FactSet. Based on the performance of the FTSE All-Share Index
Sector standouts
Pinning down the sector winners within a Santa Rally is harder, as much depends on the year in question. However, companies with a consumer focus have tended to outperform in recent years. Airlines and hotel groups such as International Consolidated Airlines, InterContinental Hotels and easyJet have been among the top fourth-quarter performers, supported by holiday travel trends. Retailers including Burberry, Games Workshop, Sainsbury’s, and Marks & Spencer have also enjoyed strong seasonal gains.
What to expect this December
Nobody knows for certain why Santa Rallies occur, but festive optimism, Christmas bonuses and thinner trading volumes are often cited as contributing factors. These dynamics could all come into play again this December. It’s been a strong year for equities overall, with both the UK and the US delivering double-digit gains, though signs of nerves are emerging as the VIX index – Wall Street’s “fear gauge” – has risen sharply heading into the final weeks of 2025.
Jemma Slingo continues: “While no one can predict whether the Santa Rally will return this December, history shows that investors who stay the course tend to be rewarded over time. The festive season can bring volatility and opportunity in equal measure, but discipline and perspective remain the best gifts investors can give themselves.”
Fidelity’s guiding principles for good investing, including the importance of time in the market, can be found here.
ENDS
December returns for the FTSE 100:
| Year | FTSE 100 Total Return (%) | Year | FTSE 100 Total Return (%) | Year | FTSE 100 Total Return (%) |
| Dec-95 | 1.2 | Dec-06 | 2.9 | Dec-17 | 5 |
| Dec-96 | 1.8 | Dec-07 | 0.5 | Dec-18 | -3.5 |
| Dec-97 | 6.5 | Dec-08 | 3.5 | Dec-19 | 2.8 |
| Dec-98 | 2.5 | Dec-09 | 4.4 | Dec-20 | 3.3 |
| Dec-99 | 5.2 | Dec-10 | 6.8 | Dec-21 | 4.8 |
| Dec-00 | 1.5 | Dec-11 | 1.3 | Dec-22 | -1.5 |
| Dec-01 | 0.3 | Dec-12 | 0.6 | Dec-23 | 3.9 |
| Dec-02 | -5.4 | Dec-13 | 1.6 | Dec-24 | -1.3 |
| Dec-03 | 3.2 | Dec-14 | -2.3 | ||
| Dec-04 | 2.5 | Dec-15 | -1.7 | ||
| Dec-05 | 3.7 | Dec-16 | 5.4 | ||
December returns for the S&P 500:
| Year | S&P 500 Total Return (%) | Year | S&P 500 Total Return (%) | Year | S&P 500 Total Return (%) |
| Dec-95 | 1.93 | Dec-06 | 1.4 | Dec-17 | 1.11 |
| Dec-96 | -1.98 | Dec-07 | -0.69 | Dec-18 | -9.03 |
| Dec-97 | 1.72 | Dec-08 | 1.06 | Dec-19 | 3.02 |
| Dec-98 | 5.76 | Dec-09 | 1.93 | Dec-20 | 3.84 |
| Dec-99 | 5.89 | Dec-10 | 6.68 | Dec-21 | 4.48 |
| Dec-00 | 0.49 | Dec-11 | 1.02 | Dec-22 | -5.76 |
| Dec-01 | 0.88 | Dec-12 | 0.91 | Dec-23 | 4.5 |
| Dec-02 | -5.87 | Dec-13 | 2.53 | Dec-24 | -2.4 |
| Dec-03 | 5.24 | Dec-14 | -0.25 | ||
| Dec-04 | 3.4 | Dec-15 | -1.58 | ||
| Dec-05 | 0.03 | Dec-16 | 1.98 | ||
