By Lewis Krauskopf

(Reuters) – Investors are weighing the risks of year-end. They wonder if December will maintain its historic trend of strong stock performances, even though markets have concerns about Omicron coronavirus variants and a more hawkish Federal Reserve.

According to Stock Trader’s Almanac, November and December were the’second- and third best months’ of the year, respectively. The index grew an average 1.7% and 1.5%.

This year, November’s gains were derailed in its final days, as concerns over how the new COVID-19 variant may impact global growth and Tuesday’s hawkish shift by the Fed in the face of surging inflation left the index with a 0.8% loss for the month. The S&P 500 is up 21.6% so far this year and remains near record highs.

Stocks may finish the year strongly despite these risks, even though they are not likely to diminish anytime soon. Historical performance should be a guide.

The S&P has notched a positive return in December 74% of the time since 1928, more than in any other month, according to data from Bespoke Investment Group.

A weaker November has only bolstered that trend, if performance over the rest of the year has been robust: This year marks the 10th time the S&P 500 was down in November but up more than 10% for the year, the firm’s data showed. Bespoke reports that December saw a rise in stocks. This was unlike the previous nine years.

“Momentum is definitely a factor,” George Pearkes, macro strategist at Bespoke, told Reuters. “If stocks are going up all year and people are underweight and chasing they may want to add to their positions before year-end.”

December’s gains tend to be even more positive when the S&P 500 has a strong first 11 months of the year, according to Ryan Detrick, chief market strategist at LPL Financial (NASDAQ:).

Since 1950, the index has gained an average of 1.7% in December when the S&P 500 has climbed at least 20% in the rest of the year, compared with an average of 1.5% for December overall, according to Detrick.

This time, markets may be faced with a lot of work.

The Cboe Volatility Index, known as Wall Street’s fear gauge, on Tuesday rose to levels seen during last week’s Omicron-fueled selloff after Fed Chairman Jerome Powell told Congress the central bank will likely discuss speeding up its taper of monthly bond purchases at its upcoming policy meeting in the face of surging inflation. While stocks fell on the news, yields on Treasury bonds increased.

“With potential changes in policy on the horizon, market participants should expect additional market volatility in this uncharted territory,” said Charlie Ripley, senior investment strategist for Allianz (DE:) Investment Management, in a recent note.

Expectations of a more hawkish Fed are likely to be an unwelcome development for the technology stocks whose outsize weighting in the S&P 500 helped send the index to record highs this year.

Rising yields on Treasury bond bonds, which often reflect expectations for more aggressive Fed policies, can dull the appeal of equity investments. They also have the potential to weigh more heavily on stocks that are high-priced as these could threaten the long-term value of their cash flows.

The S&P 500 information technology sector is trading at 27.5 times forward 12-month earnings estimates compared with its historic average of 20.8 times, according to Refinitiv Datastream.

Investors want to know if the Omicron variant is serious and severe. Goldman Sachs, NYSE:), has created four scenarios that illustrate how it could spread and what impact this may have on global economic growth.

A ”downside” scenario, in which a large wave of infections leads to lockdowns, could slow global growth to 2% in the first quarter of 2022, the bank said, 2.5 percentage points below its current forecast.

However, many investors believe that stocks will continue to be buoyant.

“The market has been looking for an excuse to sell off for quite some time,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions. ”Yet strong corporate earnings and the likelihood of an expanding economy should keep the stock market from falling significantly from here.”