Just now! US stocks surged during Christmas week! Trump's "super dovish" stance is coming, the 2026 bull market arrives early

Hello everyone, welcome back to "US Stock Notes". Today is Monday, December 22.

On Monday, the Christmas week officially kicked off, with the three major US stock indices opening higher and closing up across the board! Large-cap tech stocks generally rebounded, and concerns about excessive AI spending temporarily eased, with risk appetite surging.

The VIX fear index fell below 15, hovering around 14, reflecting a low-volatility environment where no one fears a pullback, and short-term defensive sentiment is almost zero. There are no major data releases this week—pure "seasonal rally" mode—no news is the best news!

But upon closer inspection, I noticed a fatal issue: this rally is entirely driven by bots and algorithmic trading, while retail investors are making a fatal mistake.

If you're chasing Tesla's highs or buying any small-cap stocks right now, you must read this article.

1. The Santa Rally Begins: Bots Dominate, Retail Investors Party!

This is a typical "holiday trading week".

Markets close early on Wednesday, and Christmas is on Thursday, so many institutional traders are already on vacation. Market control is handed over to quant funds and algorithmic trading—it's all "bots at play".

In this environment, retail investors are more involved in small- and mid-cap stocks because they're easier to push up, which is why the Russell 2000 outperformed the broader market today.

Last Friday, funds already flowed back into tech growth stocks, front-running the year-end rally, setting the stage for this week's gains. Today's gap-up opening in the S&P 500 is clear evidence—this is how the Santa Rally starts, and it's also a strong statement from the bulls. In this scenario, sellers are reluctant to short against the trend.

Thus, "US Stock Notes" believes: the market is currently in a unique "seasonal effect" where no positive catalysts are needed—just endogenous momentum drives stock prices higher. To make it fall, a major negative shock is required.

2. Breaking! Trump's "Shadow Fed Chair" Coming?

On the macro front, an expectation that could rewrite next year's script is brewing.

According to CNBC, Trump may appoint a new Fed Chair in the first week of January. He publicly stated the new Chair must be "super-dovish"!

This has been interpreted by the market as a signal that, once the new Chair takes office, the Fed will lean toward aggressive rate cuts if data permits. Even if the data doesn't immediately support it, they will "talk dovish" to stabilize expectations.

Thus, from now until April-May next year, the market has a "safety net"—pricing in easing expectations early! But caution is still advised. If the shadow Chair's stance diverges sharply from Powell's or if data doesn't support aggressive cuts, volatility will spike.

After the Fed Chair transition in May, the market may shift from "buying the rumor" to "selling the news," triggering profit-taking by big funds and a major pullback in US stocks.

3. Tesla: $500 in Sight? Nvidia: H200 Reassurance!

Tesla hit new intraday highs today, approaching the $500 mark!

On the news front, the state Supreme Court in Delaware overturned a previous ruling that voided Musk's 2018 compensation package, reinstating the original plan and ending years of legal disputes. Meanwhile, a massive power outage in San Francisco paralyzed Waymo (owned by Google), prompting Musk to boast that Tesla's robotaxis are unaffected, highlighting the advantage of its FSD vision-only approach.

Deutsche Bank, citing the long-term potential of robotaxis and humanoid robots, raised Tesla's valuation, maintaining a Buy rating and lifting the price target to $500. From a valuation perspective, Tesla's trailing P/E has exceeded 300x, a post-pandemic high. Given Tesla's stock behavior, a sharp correction typically follows once FOMO sentiment cools. The risks of chasing the rally short-term cannot be ignored—weigh returns against risks carefully.

As for Nvidia, its shares gapped up today, closing 1.44% higher. Reports indicate Nvidia plans to start delivering H200 chips (40,000 to 80,000 units) to third parties from February next year.

This is positive for Nvidia, demonstrating its efforts to retain third-party market share—a tangible earnings driver.

4. Amazon (AMZN): Can the "Laggard" Among the Magnificent Seven Rebound?

Year-to-date, Amazon is up just 4.12%, the worst performer among the Magnificent Seven.

Market concerns center on three issues: first, intensifying competition from Walmart, Temu, and Shein; second, declining market share for AWS, its growth engine—while growth has rebounded, it still lags Microsoft and Google; and third, capital expenditures straining cash flow. Amazon's AI infrastructure investments have driven up costs, pressuring free cash flow. As of Q3, trailing 12-month free cash flow fell to $14.8B, down sharply from $47.7B in 2024 and $21.4B in 2023.

When stocks fall, worries multiply. But Wall Street remains broadly optimistic about Amazon's 2025 prospects. Analysts unanimously rate it a Strong Buy, with a $295.8 target (~30% upside). Its trailing P/E of ~32x is still fair. For value investors, Amazon could be next year's "catch-up play."

5. Bitcoin Stalls: Is Gold the Real YYDS?

MSTR's weak rebound stems from halted Bitcoin purchases.

The company raised cash reserves to $2.19B, and its MNAV multiple has retreated to 1.1x. The key "death line" is 1.0x. The CEO warned: below 1.0x, funding dries up, forcing Bitcoin sales, which could trigger a downward spiral. This is a critical risk threshold—all eyes are on MNAV.

Meanwhile, crypto has underperformed this year—flows shifted to gold and silver. This reflects an interesting psychological shift: a "back to basics" mindset. People realize crypto was just speculative noise—precious metals hold real value.

This isn't just rotation—it's a change in expectations.

6. Conclusion: Enjoy the Froth, But Don't Leave the Party Late

This week, no news is the best news.

The calm now builds energy for the future. True traders should: enjoy the rally but avoid greed; prepare for variables from the "shadow Fed Chair"; and monitor macro data and policy signals until May.

If you have questions about US stocks or unique insights on specific sectors, leave a comment below. Like, share, and follow "US Stock Notes" for more in-depth market analysis. See you tomorrow!

PS: This content is for reference only and does not constitute investment advice. Markets carry risks—invest wisely.$Tesla(TSLA.US) $Micron Tech(MU.US) $Oracle(ORCL.US)