The beginning of the week looked bleak on Wall Street due in part to concerns on how the Omicron variant of COVID-19 is expected to affect the global economy. Things are picking back up ahead of a potential “Santa Claus Rally”.

As of 12:19 p.m. EST, the S&P 500 rose 0.7%. Roughly 85% of stocks within the S&P 500 gained ground, led by technology companies and a wide range of retailers. The index is on track for a 2.3% gain this week and is currently hovering above the record it set on Dec. 10, 2021.

The Nasdaq and Dow Jones Industrial Average also rose, at 0.8% and 0.6% respectively as of 12:19 p.m. EST.

The “Santa Claus Rally” is a phenomenon that happens the last five trading days of the year and the first two of the new year. Roughly 75% of the time, the stock market rises during these seven days. According to the Stock Trader’s Almanac, the S&P 500 has gained an average of 1.3% during the Santa Claus Rally since 1950.

While there is no definitive explanation for the Santa Claus theory, experts have come up with several possible factors:

• Optimism fueled by the holiday spirit
• Increased holiday shopping
• People investing holiday bonuses

Another possible theory for the Santa Claus Rally could be that a lot of institutional investors go on vacation at this time of year, leaving Wall Street to retail investors. Institutional investors tend to be more pessimistic, and retail investors tend to be more optimistic.

Not only did the midweek bounce-back appear to defy recent Omicron concerns, but it’s also defying inflation concerns. The Labor Department released November’s consumer price numbers Thursday. Those numbers show prices have risen 5.7% over the past year. That’s the fastest 12-month gain since a 5.8% increase for the 12 months ending in July 1982.

Thursday’s numbers were significantly higher than the 5.1% annual inflation rate reported in October. It’s also in the ballpark of the 6.8% rise in consumer prices for the 12 months ending in November according to the Labor Department’s consumer price index.