US stocks experienced a significant boost on December 23, as the S&P 500 closed higher, erasing earlier losses for the month. This rally, often referred to as the 'Santa Rally,' was driven by increased market momentum and optimism for 2026, particularly around GDP growth, corporate earnings, and advancements in AI technology. The rally was further supported by a record triple witching event and seasonal trends, which typically see increased market activity. Despite the positive sentiment, Fed Governor Millan cautioned that a potential recession could occur if interest rate cuts are delayed, which in turn heightened risk appetite among investors.