December's Hidden Winners: Which ETFs Capitalized on Market Crosscurrents

December 2024 presented a paradoxical landscape for U.S. equity markets. While the Dow Jones Industrial Average managed a modest 0.7% gain—extending its winning streak to eight consecutive months, the longest run since 2018—the broader indices stumbled. The S&P 500 retreated 0.06% for the month, and the Nasdaq Composite shed approximately 1%. More telling was the final week’s collapse: the Nasdaq plummeted 1.3%, the S&P 500 fell 0.9%, and the Dow declined 0.7%, creating the second consecutive year where December ended with a four-day selloff that threatened the traditionally bullish Santa Claus Rally.

The Three-Year Bull Run Showing Cracks

The equity market’s remarkable resilience deserves context. The S&P 500 has delivered consecutive annual gains of 24% (2023), 23% (2024), and 16% (2025)—totaling nearly 80% over three years, the strongest three-year performance since 2019-2021 when the index surged 90%. Yet history suggests such streaks rarely extend beyond the third year. Since 2000, the S&P 500 has never posted four straight annual gains, with the last occurrence being the five-year run from 2003-2007.

Multiple headwinds are now gathering. The Federal Reserve has adopted hawkish messaging for 2026, labor market indicators are cooling while inflation remains sticky, and the full impact of Trump’s tariff policies remains opaque. Meanwhile, developed-market central banks show little appetite for rate cuts in early 2026. Overvaluation concerns plague the artificial intelligence sector that has fueled the entire rally.

Where Capital Fled When Equities Faltered

When broad market momentum dissipated, money flowed toward specific asset categories that offered structural tailwinds independent of equity sentiment.

The Cannabis Pivot

Cannabis stocks experienced a dramatic mid-December reversal, with reports of the Trump administration’s plans to reschedule marijuana from Schedule I to Schedule III status electrifying the sector. The AdvisorShares Pure US Cannabis ETF (MSOS) jumped 35.6%, while the Roundhill Cannabis ETF (WEED) climbed 35.5%. Real-time WEED quotes during December’s final weeks reflected this regulatory arbitrage opportunity, as investors priced in potential federal normalization that could unlock significant value across major cannabis operators.

The Precious Metals Complex

Silver became the month’s standout performer. The abrdn Physical Silver Shares ETF (SIVR) advanced 25.9%, nearly matching the iShares Silver Trust (SLV) at 25.8%. Silver’s rally drew strength from two sources: industrial demand accelerating as the metal plays an essential role in AI infrastructure and clean energy applications, plus a sharply weaker U.S. dollar. The Invesco DB US Dollar Index Bullish Fund (UUP) declined 4.2% during December—a significant move that reduced the dollar headwind typically facing commodity prices.

Platinum followed a similar trajectory. The abrdn Physical Platinum Shares ETF (PPLT) rose 22.2%, and GraniteShares Platinum Trust (PLTM) gained 21.9%. Platinum’s surge reflected genuine supply constraints—the World Platinum Investment Council forecasts a 2025 deficit of 692,000 ounces, representing three consecutive annual shortfalls. Industrial demand from the automotive sector is also recovering, bolstered by the EU’s move to relax its 2035 internal combustion engine ban.

The Space Economy Takes Flight

Perhaps the most explosive rally came from space-focused investments. Rocket Lab Corporation (RKLB) skyrocketed 73% in December alone, riding momentum from its next-generation Neutron rocket development and fresh funding from the Canadian Space Agency. The broader Procure Space ETF (UFO) gained 16.2%, supported by broader market enthusiasm around a potential $1.5 trillion SpaceX IPO reportedly planned for 2026.

Copper’s Industrial Demand Story

The Global X Copper Miners ETF (COPX) climbed 14.3% as copper prices reached record levels in 2025. Beyond traditional construction demand, the rapid proliferation of AI data centers has created a new pillar for copper consumption—the metal is indispensable in high-capacity power lines, transformers, and cooling systems. This structural demand tailwind provided steady support even as equity volatility increased.

The Takeaway

December’s market action revealed a critical investment principle: when headline-driven equity weakness emerges, opportunities surface in thematic sectors with independent catalysts. Whether regulatory change (cannabis), currency dynamics and industrial demand (precious metals), technological transformation (space), or secular infrastructure buildout (copper), the best-performing ETFs in December each possessed narratives disconnected from traditional equity market sentiment.