Markets Take a Breather After Holiday Cheer
As investors return to their desks after the Christmas break, U.S. stock index futures are trading lower in thin volumes. The focus is now on the final month of the year, with hopes pinned on the traditional “Santa Claus rally” to boost market sentiment.
Tech Giants Take a Hit
Heavyweight stocks like Nvidia and Alphabet are feeling the pressure, down 1.1% and 0.5% respectively in premarket trading. The Dow E-minis are down 146 points, or 0.33%, while the S&P 500 E-minis and Nasdaq 100 E-minis are down 0.44% and 0.54% respectively.
Global Markets Take a Break
With markets in London and parts of Asia closed on Thursday, trading volumes are expected to remain light. The S&P 500 and Nasdaq, however, managed to wrap up Tuesday’s truncated session with a third straight day of gains, thanks to the performance of megacap and growth stocks.
The Magnificent Seven
Gains in Apple, Tesla, Alphabet, Microsoft, and Meta Platforms have accounted for more than half of the S&P 500’s 28.4% total return this year. Without these top performers, the benchmark index’s total return would have been a mere 13.2%, according to S&P Dow Jones Indices Senior Index Analyst Howard Silverblatt.
Federal Reserve’s Shadow Looms
U.S. stocks have hit a speed bump this month, following election-led gains in November, as investors contend with the Federal Reserve’s projection of fewer interest rate cuts in 2025. The central bank’s stance has cast a shadow over the market, making it challenging for investors to navigate the current landscape.
Hoping for a Santa Claus Rally
Investors are now pinning their hopes on a strong finish to the year, with the “Santa Claus rally” expected to bring some much-needed cheer to the markets. Historically, the S&P 500 has gained an average of 1.3% in the last five trading days of December and the first two days of January since 1969.
Jobless Claims Data Ahead
The Labor Department’s data on weekly jobless claims is due before the market opens on Thursday, although claims have entered a period of volatility, making it challenging to get a clear view of the job market. Separately, major banks and business groups have sued the Federal Reserve, alleging that the U.S. central bank’s annual “stress tests” of Wall Street firms violate the law.
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