Wall Street has a tradition: during the final trading week of the year, markets tend to drift higher in what's affectionately called the Santa Claus Rally. But this year, something feels different. The usual tech-dominated festivities are getting company from some unexpected guests.

The numbers tell an interesting story. According to Seasonax, the S&P 500 has averaged a 0.95% gain during the year's final trading week over the past 95 years, finishing positive 71% of the time. The Dow Jones Industrial Average does even better, posting an average 1.06% gain over 128 years with a 77% win rate. So far, so festive.

But here's where it gets interesting: the Nasdaq 100, home to tech darlings, has only managed a modest 0.4% average gain during the same seasonal window and finished higher just 55% of the time. That's barely better than a coin flip. Which raises the question: if Santa's coming to town, where exactly is he stopping?

Following the Money Through ETFs

ETF flows offer a revealing glimpse into where investors are actually placing their bets as we close out the year. Yes, tech still has believers, but the story is more nuanced than usual.

The Roundhill Magnificent Seven ETF (MAGS) continues attracting capital from those maintaining faith in Big Tech. This fund offers equal-weight exposure to Tesla Inc. (TSLA), Amazon.com, Inc (AMZN), Alphabet Inc (GOOGL), Meta Platforms Inc (META), Nvidia Corp (NVDA), Apple Inc (AAPL), and Microsoft Corp (MSFT). The fund climbed about 2% over the past five days. Strong earnings from Micron Technology Inc (MU) have kept the AI narrative alive, though enthusiasm seems tempered by valuation concerns and Fed positioning.

But outside the tech bubble, things are heating up in unexpected places.

The State Street SPDR S&P Metals & Mining ETF (XME) emerged as a standout Santa trade, rocketing nearly 7% higher over the past five days. Metal prices have surged on tight supply, robust industrial demand, and safe-haven flows. Gold miners like Newmont Corporation (NEM), trading near recent highs, are benefiting from expectations of Fed rate cuts and persistent geopolitical uncertainty. For year-end positioning, metals offer something tech can't right now: a hedge.

Then there's the real economy making its presence felt. The U.S. Global Jets ETF (JETS) gained about 1% last week, powered by record holiday travel forecasts. AAA estimates over 122 million people will travel between December 20 and January 1. Although the fund dipped 1.4% on Tuesday, the underlying demand story remains compelling. People are flying, and airlines are cashing in.

Defense contractors are also having a moment. The iShares U.S. Aerospace & Defense ETF (ITA) climbed roughly 6% in the last five days, driven by escalating global defense spending and heightened geopolitical tensions. Apparently, defense investors don't take holidays.

A Broader, More Selective Rally

What we're seeing isn't your typical tech-only Santa Rally. Instead, conviction is spreading across metals, travel, aerospace, and defense alongside continued interest in Big Tech. If Santa shows up this year, he's bringing a diversified portfolio.

This shift makes sense given the backdrop. Tech valuations remain elevated, the Fed is signaling continued caution, and geopolitical risks haven't gone anywhere. In that environment, investors seem to be hedging their holiday cheer across multiple sectors rather than betting everything on one sleigh.

The seasonal tailwinds are real, backed by decades of historical data. But the 2025 version looks more selective, more cautious, and frankly, more interesting than the straightforward tech rallies we've grown accustomed to. ETF flows are revealing what conviction actually looks like right now: spread out, defensive in places, opportunistic in others.

So if you're watching for the Santa Claus Rally this week, don't just look at the usual suspects. This year, Santa's sleigh appears to be carrying a fully diversified load.