New Year, New Market Trends
As the calendar flips to 2025, the US stock market is off to a modest start. The S&P 500 is on track to break its four-day losing streak, rising 0.3% in early trading, while the Dow Jones Industrial Average is up 226 points, or 0.5%. The Nasdaq composite is also seeing a 0.2% increase.
Tech Stocks Lead the Way
Big Tech stocks, which have dominated the market for much of the last few years, are once again leading the charge. Nvidia, a key player in the artificial-intelligence technology space, has seen its stock rise 1.5% following a remarkable 170% jump last year. Wedbush analyst Dan Ives believes this trend will continue, citing the “same tech playbook in year 3 of this tech AI driven bull market.”
Contrarian Concerns
However, not everyone is optimistic. With Wall Street analysts recommending stocks at their highest level since early 2022, according to Bank of America strategist Savita Subramanian, some contrarians are feeling nervous. This measure has historically been a reliable indicator, and it’s close to triggering a signal for contrarians to sell.
Tesla Takes a Hit
One notable exception to the tech stock surge is Tesla, which slumped 5.5% after disclosing lower-than-expected vehicle deliveries in the last quarter of 2024.
Bond Market Eases Pressure
In the bond market, Treasury yields have eased, taking some pressure off the stock market. The yield on the 10-year Treasury fell to 4.53% from 4.57% late Tuesday.
Job Market Remains Solid
A report released this morning showed fewer US workers applied for unemployment benefits last week than economists expected, signaling that the job market remains solid. This follows a surprise avoidance of recession last year, and hopes are high that the US economy can continue growing in 2025.
Global Market Trends
Meanwhile, in China, a report showed slowing growth for its factories, leading to a 2.2% drop in Hong Kong’s stock index and a 2.7% drop in Shanghai’s. Chinese leader Xi Jinping’s New Year’s address did little to raise optimism among investors, who are hoping for more aggressive action to support the economy and boost stock prices. Elsewhere in Asia and Europe, indexes were mixed, while commodity prices rallied, with crude oil, natural gas, and gold all climbing.
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