Wall Street analysts warn: this year's "Christmas rally" may be absent, and investors are buying more downside protection.

On December 1, the “Christmas rally” is typically one of the most popular traditions on Wall Street. After Thanksgiving, U.S. stocks often rise slowly, with reduced volatility, and December frequently becomes one of the strongest months of the year. However, strategists say that this year, this “Santa Claus” may not appear. Amy Wu Silverman, the head of derivatives strategy at RBC Capital Markets, stated, “I don't know if we will have a 'Christmas rally,' but we will definitely encounter another volatility 'pit,' or a rebound in volatility.” She pointed out that bearish sentiment in the options market has increased, and investors are buying more downside protection. Omar Aguilar, CEO and Chief Investment Officer of Schwab Asset Management, also sees similar risks brewing beneath the surface. He stated on Monday, “We are seeing a lot of dispersion and divergence in many things. After the government shutdown, the arrival of new macro data is unbalanced, and there are early signs of rotation among industry leaders.” (Jin10)