In the early 20th century, technological advancements such as the Linotype machine streamlined and spurred the rise of mass-circulation magazines and newspapers, which became more accessible to readers throughout the United States. The magazine and newspaper market’s newfound ability to service a broad audience’s preferences fostered the advent of the short-story genre in turn. These publications capitalized on the public’s desire for short stories—readers were drawn to the genre’s concise snapshots and evocations of the human condition. As such, well-known writers—F. Scott Fitzgerald, Charles Dickens, Ernest Hemingway—began to publish thousands of stories in newspapers, literary journals, and magazines. O. Henry, in particular, thrived in this new publication market, writing one short story a week for the Sunday edition of the New York World in the 1900s. The writer published hundreds of short stories throughout his lifetime, all the while amplifying the mass appeal and pervasiveness of the genre.
The short story’s popularity coincided with the rise of modernism, a movement that defied classical or traditional art conventions. Modernism’s cultural influence and sensitivity to form fragmented the short-story genre. Some writers, such as O. Henry, ignored modernism's ascendancy and instead employed conventional plot structures, unembellished everyday characters, and sentimentalized depictions of quotidian life. With its traditional plot beats and idealization of Della and Jim's loving marriage and impoverished lifestyle, "The Gift of the Magi" fully embodies O. Henry's rejection of modernism's subversive principles and ideas.
Other writers, such as Hemingway, experimented with the short story’s form, disrupting the narrative with pessimistic and transgressive themes, intertextuality, and a lack of a discernible plot. Notably, the conventional and modernist-influenced short stories commercially flourished alongside the increased circulation of literary publications. It is this variation and flexibility inherent to the short story form that underpins the genre's enduring appeal and popularity in the 21st century.