Stock futures were marginally higher as trading got began for 2025, with optimism that the market can rekindle the momentum that propelled it to notch two-straight years of yearly gains above 20%.
S&P 500 futures gained 30 points, or 0.51%, while futures linked to the Dow Jones Industrial Average increased 162 points, or 0.38%. Futures for the Nasdaq-100 increased 154 points, or 0.73%.
Despite sluggish trading in the last few days of 2024, equities nevertheless generated strong returns for the year. Last year, the 30-stock Dow gained about 13%, while the S&P 500 jumped 23%. The Nasdaq Composite performed better, rising 29%, driven by the excitement surrounding artificial intelligence and interest rate reductions.
A large portion of the market’s activity in 2024 was driven by members of the so-called Magnificent Seven. While iPhone manufacturer Apple saw a 30% increase, AI chip whiz Nvidia saw a 171% boost for the year. However, by the conclusion of the year, some profit-taking resulted from these significant gains. To end the year, the S&P 500 saw four consecutive days of declines, which hasn’t happened since 1966.
Because of all of this, a “Santa Claus rally” is unlikely to happen. Typically, rising equities during the first two trading days of January and the last five days of a calendar year define that well-known market indication.
According to Dow Jones market statistics dating back to 1950, the broad index has finished up about 80% of the time and has increased by an average of 1.3% throughout this time.
Investors may be evaluating the effects of a tragic incident in New Orleans on New Year’s Day that is being looked into as a potential terrorist strike, which would increase the pressure. The Federal Bureau of Investigation said it’s possible the suspect, who drove a truck into a crowd, wasn’t “solely responsible” for the incident.
Economic data has been scarce during the holiday-shortened week, but Thursday will see the release of weekly unemployment claims statistics, which will provide insight into the state of the labour market.
