U.S. stock futures were trading higher on Tuesday following Monday’s selloff. All four index futures rose in trade.
The Santa Rally, a typical year-end market surge, has seemingly failed to materialize this year, with stocks experiencing a downturn. However, the S&P 500 index is on its way to achieving 20% plus return for the second consecutive year in 2024.
The 10-year and two-year Treasury notes yielded 4.51% and 4.24%, respectively. The probability of having no change in the interest rates for the upcoming Jan. 31, 2025, FOMC meeting was at 88.8%, according to CME Group’s FedWatch tool.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.40% |
| S&P 500 | 0.29% |
| Dow Jones | 0.18% |
| Russell 2000 | 0.38% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY was up 0.35% to $590.26 and the Invesco QQQ Trust ETF QQQ rose 0.44% to $517.90, according to Benzinga Pro data.
Cues From The Last Session
U.S. stocks declined on Monday, with the Dow Jones Industrial Average falling over 400 points during the trading session. The tech sector continued its downward trend, with Tesla Inc. and Meta Platforms Inc. shares dropping 3.3% and 1.4%, respectively.
Despite the Monday losses, major indices still posted gains for the previous week. The Dow Jones Industrial Average rose 0.4%, ending a three-week losing streak, while the S&P 500 added 0.7% and the Nasdaq Composite climbed 0.8%.
On the economic data front, the Chicago Purchasing Managers’ Index (PMI) fell to 36.9 in December from 40.2 in November, below market expectations of 42.5. Conversely, U.S. pending home sales increased 2.2% month-over-month in November, exceeding market estimates of a 0.7% increase. The Dallas Fed’s Texas manufacturing activity index also showed improvement, rising six points to a reading of 3.4 in December.
All sectors within the S&P 500 closed lower, with consumer discretionary, materials, and healthcare sectors experiencing the largest declines.
At the close of trading on Monday, the Dow Jones Industrial Average stood at 42,573.73, down approximately 418 points. The S&P 500 fell 1.07% to 5,906.94, and the Nasdaq Composite dipped 1.19% to 19,486.79.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -1.19% | 19,486.78 |
| S&P 500 | -1.07% | 5,906.94 |
| Dow Jones | -0.97% | 42,573.73 |
| Russell 2000 | -0.75% | 2,227.78 |
Insights From Analysts
Tom Lee, the head of research at Fundstrat attributed this decline to profit-taking and investor uncertainty surrounding the Federal Reserve’s future interest rate policies. However, he emphasizes that the positive market outlook for 2025 remains largely unchanged.
According to Lee, even if the S&P 500 closes the year at 5,900, it doesn’t diminish the significant potential for growth in 2025.
Looking ahead to next year, Lee said that he will closely monitor the CEO confidence index and the ISM manufacturing data for signs of economic expansion. He predicts that the S&P 500 could potentially reach 7,000 in the first half of 2025, representing substantial upside from current levels.
According to Ed Yardeni of Yardeni Research, there are multiple reasons for missing the Santa Rally. “From a sentiment perspective, there have been too many bulls. From a technical perspective, breadth has been narrowing again as a few LargeCap momentum stocks continue to outperform.”
“From a fundamental perspective, while earnings growth should remain bullish, the Fed may be done easing monetary policy for a while at the same time as the outlook for fiscal policy under Trump 2.0 is uncertain. From a valuation perspective, forward P/Es are stretched,” he added.
According to Jeff Weniger, the head of equities at WisdomTree, the S&P 500 has had positive returns in the next 12 months each time economists’ recession prediction has fallen to 15%.
Also, Jason Goepfert, consultant at White Oak Consultancy highlighted in an X post that S&P 500 futures have gapped down more than 1% during the Santa Rally period for the fifth time in 2024.
See Also: How To Trade Futures
Upcoming Economic Data
A few important data points will be released in this truncated week that will help investors determine the future course of action.
- On Tuesday, November's S&P Case-Shiller home price index for 20 cities will be announced at 9:00 a.m., ET.
- No data is slated to be released on Wednesday, Jan. 1, owning to a New Year's holiday.
- On Thursday, initial jobless claims till Dec. 28 will be announced at 8:30 a.m., ET.
- Construction spending data for November will be released at 10:00 a.m., ET.
- On Friday, ISM manufacturing data for December will be announced at 10:00 a.m., ET.
Stocks In Focus:
- Sangamo Therapeutics Inc SGMO was down 52.55% in premarket after it announced that its collaboration and license agreement with Pfizer on giroctocogene fitelparvovec will terminate effective April 21, 2025.
- Cemtrex Inc CETX was up 15.02% after it posted stronger-than-expected sales for the fourth quarter, reporting quarterly sales of $18.10 million which beat the analyst consensus estimate of $16.39 million.
- CompoSecure Inc CMPO was up 4.47% after it announced plans to spin off Resolute Holdings Management.
- Ambow Education Holding AMBO was down 13.53% after its net revenue fell by 11.1% to $2.4 million during the quarter.
- Faraday Future Intelligent Electric Inc FFIE was up 17.2% after the company disclosed on Sunday that entrepreneur Luke Hans will receive the first ‘FF 91’ 2.0 Futurist Alliance EV of 2025 during a January delivery ceremony with company executives.
Commodities, Gold And Global Equity Markets:
Crude oil futures were higher in the early New York session by 0.56% to hover around $71.39 per barrel.
The gold spot index was up by 0.39% to $2,628.34 per ounce. The Dollar Index was down 0.17% to 107.944 level.
Asian markets were mostly lower on Tuesday as Japan’s Nikkei 225, Australia’s ASX 200, South Korea’s Kospi, and China’s CSI 300 declined. Whereas, Hong Kong’s Hang Seng ended higher. European markets were mixed.
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