U.S. stock futures declined on Tuesday in premarket hours as Wall Street awaits Federal Reserve‘s final interest rate decision for the current year and its monetary policy forecasts for 2025.
On Monday, the tech-heavy Nasdaq 100 set a new record high and crossed the 22,000-point milestone, whereas Dow Jones fell for eight sessions. The futures of all four major indices were trading lower.
The 10-year and two-year Treasury notes yielded 4.42% and 4.27%, respectively. The Federal Open Market Committee will begin its two-day meeting, later in the day.
It is widely expected to announce another interest rate reduction at the conclusion of their meeting on Wednesday. The probability of a further 25 basis point rate cut in December was at 96.3% versus 61.9% probability a month ago, according to CME Group’s FedWatch tool.
If the Fed cuts rates, it would be the third consecutive cut, bringing the federal funds rate down from its current level of 4.50% to 4.75%. Following the meeting, Chairman Jerome Powell‘s remarks will be closely scrutinized by market participants.
| Futures | Change (+/-) |
| Nasdaq 100 | -0.07% |
| S&P 500 | -0.25% |
| Dow Jones | -0.31% |
| Russell 2000 | -0.10% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY was down 0.24% to $605.36 and the Invesco QQQ Trust ETF QQQ fell 0.087% to $537.70, according to Benzinga Pro data.
Cues From The Last Session
Tech stocks continued their upward trajectory on Monday, with the Nasdaq 100 index surging over 1.4%. Key index components drove this rally.
Broadcom Inc. led the charge, skyrocketing over 11% after receiving favorable analyst ratings. The company’s AI-driven growth potential was further bolstered by its recent announcement of a partnership with Apple Inc. to develop a cutting-edge AI chip.
Tesla Inc also experienced significant gains, climbing more than 6%. This surge extended its post-election rally, fueled by positive analyst sentiment. Wedbush Securities highlighted Tesla’s potential as a “game-changer” in AI and autonomous driving under the Trump administration.
Other indices also saw positive momentum, with the Russell 2000 rising 0.64% and the S&P 500 edging up 0.38%. However, the Dow Jones Industrial Average dipped 0.25%, primarily due to losses in the energy and healthcare sectors.
On the economic front, private-sector surveys indicated a stronger-than-expected rebound in December activity. The services sector PMI soared to 58.5, marking the highest level since October 2021. The Composite PMI also climbed to 56.6, its best reading since April 2022, as robust growth in services offset continued weakness in manufacturing.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 1.24% | 20,173.89 |
| S&P 500 | 0.38% | 6,074.08 |
| Dow Jones | -0.25% | 43,717.48 |
| Russell 2000 | 0.64% | 2,361.99 |
Insights From Analysts
As the market continues to exhibit resilience, driven by hopes of AI-led growth and reduced regulatory hurdles, the actual economic impact of AI adoption is still some time away, said Jeremy Siegel. “This disconnect between potential and reality allows the bullish sentiment surrounding the sector to persist,” he added.
Siegel is a senior economist at WisdomTree and emeritus professor of finance at the Wharton School, University of Pennsylvania.
“A rotation into neglected areas of the market, such as value or small-cap stocks, could materialize in 2025 if regulatory reforms and easing financial conditions create a more favorable backdrop for these non-tech segments. Investors should remain vigilant as tech valuations climb further, with an eye toward rebalancing opportunities early next year,” Siegel wrote in his weekly market commentary.
The chief market strategist at Carson Group, Ryan Detrick spoke about the continued skewness in the market breadth, in an X post. He asked a rhetorical question “Many claim this (trend) is bearish, but is it?”
According to the data shared by him, the last time market breadth was in the favour of decliners for 11 days, the index rose by 35.6% over the next year.
“Looking at the longest streaks ever actually appears to be rather bullish. Significant outperformance across the board out one year,” he added.
Upcoming Economic Data
Important data is slated to be released this week that will help investors determine the future course of action.
- On Tuesday, U.S. retail sales data for November will be announced at 8:30 a.m., ET.
- The industrial production and capacity utilization data for November will be announced at 9:15 a.m., ET.
- The home builder confidence index data will be released for December at 10:00 a.m., ET.
- And, lastly, the Federal Open Market Committee meeting will begin on Tuesday.
Stocks In Focus:
- Sealsq Corp LAES rose 25.31% in premarket after it announced that institutional investors will sell 7,692,308 ordinary shares of the company at $1.30 per share in a registered direct offering, expected to close on Dec. 16.
- Tesla Inc TSLA was up 2.63%, continuing its momentum from yesterday after receiving an upgrade in its price target by Wedbush Securities.
- Nvidia Corp NVDA was down 2.08% after CNBC’s Jim Cramer cautioned investors, saying that a “reversal” will happen and it will be a “vicious” one.
- D-Wave Quantum Inc QBTS was up 5.12% after CEO Alan Baratz highlighted it’s leadership in quantum computing, emphasizing their focus on delivering real-world value to customers through annealing quantum computing.
- Quantum Computing Inc QUBT was up 4.69% after it recently announced its second purchase order for its thin-film lithium niobate photonic chip foundry from the University of Texas, Austin.
- Rigetti Computing Inc RGTI was up 5.81% in premarket amid continued momentum in the quantum computing space. The rally across quantum names follows the announcement of Google’s quantum computing chip “Willow,” which achieves error reduction and performs computations faster than traditional supercomputers.
Commodities, Bonds And Global Equity Markets:
Crude oil futures were declining in the early New York session by 1.17% to hover around $69.88 per barrel.
The gold spot index fell by 0.54% to $2,655.61 per ounce. The Dollar Index was up 0.17% to 107.035 level.
Asian markets declined on Tuesday, including Hong Kong’s Hang Seng, Japan’s Nikkei 225, India’s S&P BSE Sensex, and South Korea’s Kospi index. Australia’s ASX 200, and China’s CSI 300 index bucked the trend. Most European markets also fell except France’s CAC 40 and Euro Stoxx 50.
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