The year draws to a close in the week ahead as investors look ahead to 2026, which promises to be consequential. Stocks could end the year on a high note next week. With just three trading sessions left in 2025, the major averages are making a dash toward all-time highs. On Friday, the S & P 500 traded not even 1% below the 7,000 milestone. It would be a final flourish for a market that has scaled a wall of worry this year, muscling past the early tariff chaos in April, as well as fears of a burst AI bubble. There's no shortage of worries the market will have to surpass in the year ahead. CNBC's 2026 Market Strategist Survey shows the S & P 500 is expected to post yet another double-digit advance, given the support easy monetary policy, fiscal stimulus and artificial intelligence are supposed to give corporate earnings growth. But 2026 is also a midterm election year, historically a volatile time for markets. This is especially true in the second half — when the S & P 500 averages a decline of 6.6% over the third and fourth quarters, according to the Stock Trader's Almanac. What's more, it comes at a time when valuations appear to have less wiggle room. The broad market index trades trading at a forward earnings multiple of 22. "Historically, whenever you come from such a strong year as 2025, you do see that volatility is higher in the following year," said Giuseppe Sette, co-founder and president of Reflexivity. "Not because something needs to go wrong, but because if something goes wrong, the market is more fragile." Yet, for those traders sticking to their trading desks heading into 2026, during a week of low volume and higher volatility, it's a good time to position for whatever investors expect at the beginning of the year, Sette said. Seasonally speaking, investors have some strong tailwinds on their side next week. There's the Santa Claus rally , the trading period between the last five trading days of the year and the first two of the new year, that has historically helped the S & P 500 average a gain of 1.3%, the Stock Trader's Almanac showed. Thursday of next week will mark the start of the First Five Days of trading for the year. Historically, this short period has signaled what's to come for the market. The last 48 times the S & P 500 was positive during its first five trading sessions, it was followed by full-year gains in 40 occasions, the Almanac showed. Next week will also bring the FOMC minutes, due out Wednesday at 2 p.m. ET. The New York Stock Exchange will be closed Thursday, Jan. 1 for New Year's Day. Week ahead calendar All times ET. Monday, Dec. 29 Tuesday, Dec. 30 Wednesday, Dec. 31 2 p.m. FOMC Minutes Thursday, Jan. 1 NYSE closed for New Year's Day. Friday, Jan. 2
