Check back for updates throughout the trading day
U.S. equity futures edged higher in early Monday trading as investors looked to the holiday-shortened week and the traditional ‘Santa Claus rally’ to pull stocks out of their sharp December downturn.
Stocks ended higher on Friday following a softer-than-expected reading of the Federal Reserve’s preferred inflation gauge, the PCE Price Index and some solid gains for megacap tech names, although all three major benchmarks recorded weekly declines as Treasury yields surged and risk appetite faded.
Investors are now recalibrating their interest rate projections following the Fed’s December policy meeting last week, which included an increase in the central bank’s inflation forecast and a halving of its guide for 2025 rate cuts.
That’s lifted benchmark Treasury bond yields to multi-month highs, with rate-sensitive 2-year notes trading at 4.321% and 10-year paper rising 42 basis points over the past two weeks to 4.541%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, is also trading near a two-year high at 107.983.
Wall Street’s ‘Santa Claus Rally’ has typically boosted stocks by around 1.3% over the final five trading days of the year, as well as the first two of the next.
BRYAN R. SMITH/Getty Images
The moves have added pressure on stocks over the month of December, with the S&P 500 down 1.68% and the equal-weighted S&P 500 ETF, which smooths out the impact of megacap tech stocks, down 7%.
Santa Claus on Wall Street
The typical end-of-year ‘Santa Claus Rally’, however, could provide final boost to a 2024 performance for U.S. stocks, as the final five trading days of the year, as well as the first two of the next, have delivered an average gain of 1.3% over the past 55 years.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 suggest an 8 point opening bell gain while the Dow Jones Industrial Average is little-changed from Friday’s close.
Related: Inflation report adds to interest rate cut bet complexity
The tech-focused Nasdaq, while fell 1.78% last week to trim its December gain to 1.84%, is called 65 points higher, with Nvidia (NVDA) , Tesla (TSLA) and Palantir Technologies (PLTR) active in premarket trading.
In Europe, the regional Stoxx 600 benchmark rose 0.39% in early Frankfurt trading, but remains on pace for one of its worst quarterly performances in more than two years. Britain’s FTSE 100, meanwhile, was marked 0.14% higher in London.
More Wall Street Analysts:
Veteran analyst who forecast Rocket Lab’s stock rally updates price targetAnalysts revamp Ciena stock price target after AI outlookTop analyst revisits Micron stock price target ahead of Q1 earnings
Overnight in Asia, Honda and Nissan formalized their merger talks, and pegged a 2026 completion date for the historic tie-up, helping lift the Nikkei 225 1.19% into the close of trading.
The region-wide MSCI ex-Japan benchmark, meanwhile, was last marked 1.31% higher into the close of trading.
Related: Veteran fund manager delivers alarming S&P 500 forecast
