U.S. stocks could open on a positive note on Wednesday, continuing to rally after Donald Trump's inauguration as the 47th President of the U.S. on Monday. Futures point to a second consecutive day of positive start to the Trump presidency.
As the new administration settles in, President Trump announced an ambitious $500 billion artificial intelligence project dubbed Stargate. This venture includes Oracle Corp. ORCL, Microsoft Corp.-backed MSFT OpenAI, and SoftBank Group SFTBY.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.84% |
| S&P 500 | 0.40% |
| Dow Jones | 0.17% |
| R2K | 0.17% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY gained 0.37% to $605.24 and the Invesco QQQ ETF QQQ rose 0.77% to $528.86, according to Benzinga Pro data.
Cues From Last Session:
U.S. stocks ended Tuesday on a positive note, with Dow Jones and S&P 500 ending the day with major gains, while the Nasdaq closed 0.64% in the green.
Crude oil prices edged lower as traders await clarity about the new Trump administration's agenda.
Vistra Corp. VST and Oracle Corp. ORCL were among the top gainers on Tuesday, surging 8.48% and 7.17% during the session respectively.
On the economic data front, U.S. industrial production rose by 0.9% in December, ahead of estimates of a 0.3% increase. Housing starts rose by 15.8% from the previous month to an annualized rate of 1.499 million units in December.
Most sectors on the S&P 500 closed on a positive note, with industrials, real estate, and healthcare stocks recording gains on Tuesday.
However, energy stocks bucked the overall market trend, closing the session lower.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.64% | 19,756.78 |
| S&P 500 | 0.88% | 6,049.24 |
| Dow Jones | 1.24% | 44,025.81 |
| Russell 2000 | 1.85% | 2,317.97 |
Insights From Analysts:
Ryan Detrick, chief market strategist at Carson Global, underscored that there is a high possibility that 2025 could be a good year as far as equity markets are concerned.
"The year after an election year has been quite strong lately, with stocks higher 9 of the past 10 times going back to Reagan’s second term," he said.
In 2017, the first year of Trump's previous term, the Dow and S&P 500 delivered a return of 19.4%. Likewise, in Biden's first year in office, the return stood at 26.9%.
Jeremy Siegel, Wharton professor and senior economist at WisdomTree, underscored the resilient U.S. economy and positive indicators going into 2025.
"The outlook for Q4 GDP growth is strong, with estimates ranging between 2.5% and 3%, a testament to the underlying strength of the economy as we transition into 2025," he said.
He also has a word of caution about the impact of Trump's tariff plans, but noted that they are "likely months away."
"The S&P 500 thus far remains resilient, but I maintain my call for a correction this year as bond yields rise further, which could pressure valuations. This presents opportunities for less richly priced stocks, sectors, and strategies."
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Upcoming Economic Data
Here's what investors will keep an eye on for Wednesday and the rest of the week:
- On Wednesday, leading economic indicator data will be released at 10:00 a.m., ET.
- On Thursday, initial jobless claims data will be released at 8:30 a.m. ET.
- On Friday, S&P flash services PMI and manufacturing PMI will be released at 9:45 a.m. ET.
- Existing home sales and consumer sentiment data will be released at 10 a.m., ET.
Stocks In Focus:
- Oracle Corp. ORCL stock gained over 8% in premarket trade on Wednesday after President Trump announced the Stargate AI joint venture, comprising Oracle, OpenAI, and SoftBank.
- Netflix Inc. NFLX surged over 14% after stunning the Street with 20 million new subscribers and a price hike amid its best quarterly performance ever.
- Nvidia Corp. NVDA, Arm Holdings Plc. ARM and other chip stocks gained in pre-market after Trump's AI announcement.
- Investors are awaiting earnings results from Abbott Laboratories ABT, The Procter & Gamble Company PG, and Johnson & Johnson JNJ today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures fell in the early New York session, declining by 0.42% to hover around $75.51 per barrel.
The 10-year Treasury note yield edged higher to 4.585%.
Most of the major Asian markets were mixed on Wednesday, while European markets were in the green in early trading.
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