U.S. stock futures were trading higher on Monday in premarket hours after the tech-heavy Nasdaq 100 index extended its relentless climb last week, setting new record highs and nearing the 22,000-point milestone. The futures of all four major indices were trading higher.
The 10-year and two-year Treasury notes yielded 4.38% and 4.23%, respectively. The Federal Reserve’s upcoming meeting this week is highly anticipated by market observers.
The Federal Open Market Committee 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 rose to 97.1% versus 61.9% 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.
Investors will receive another critical economic data point on Friday with the release of the November personal consumption expenditures (PCE) inflation index. This release follows other inflation indicators that suggest price increases accelerated in November.
Prior to that, GDP revisions on Thursday will reveal whether the economy maintained the previously estimated 2.8% growth rate for the third quarter.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.31% |
| S&P 500 | 0.20% |
| Dow Jones | 0.10% |
| Russell 2000 | 0.27% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY was up 0.20% to $605.44 and the Invesco QQQ Trust ETF QQQ rose 0.32% to $532.25, according to Benzinga Pro data.
Cues From The Last Session
The Nasdaq 100 rally was driven by tech giants and AI optimism. It’s set to double since the start of 2023, with five of the “Magnificent Seven” stocks hitting record highs. Broadcom Inc. joined the $1 trillion market cap club after strong earnings.
The Dow Jones Industrial Average, on the other hand, fell for the seventh consecutive day on Friday and S&P 500 index closed marginally lower.
Inflation data released during the week raised some red flags. Consumer inflation rose 2.7% year-over-year in November, in line with expectations, but producer inflation jumped to 3% year-over-year, exceeding estimates of 2.6%. This marked the sharpest increase since February 2023, raising concerns about potential cost pass-throughs to consumers.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.12% | 19,926.72 |
| S&P 500 | -0.002% | 6,051.09 |
| Dow Jones | -0.20% | 43,828.06 |
| Russell 2000 | -0.60% | 2,34.90 |
Insights From Analysts
Talking about the possibility of a “Santa Rally,” by the end of December the chief market strategist at Carson Group, Ryan Detrick shared a chart titled ‘Santa Comes Later In December’ showing how the market has picked up after Dec. 16, on an average from 1950 to 2023.
He said, “Weak breadth, inflation heating up, bears saying they are sorry, etc, have all been listed as reasons for the recent weakness. Or maybe it is perfectly normal for stocks not to do much the first half of December, before an end-of-year rally?”
He further made a case for a year-end rally in another X post. He shared a chart that compared high-yield bonds with U.S. Treasury bonds and high-beta stocks with low volatility stocks. “High yield and high beta are outperforming bonds and low volatility,” he said.
Tom Lee, the managing partner and head of research at Fundstrat Global Advisors, hosted a webinar outlining his 2025 outlook. According to him, the S&P 500 will have a better first half of the year getting up to 7,000, followed by a weaker second half of the year with us ultimately ending at 6,600
“To us, the downside risks are: DOGE too effective and GDP falls on spending cuts, (if) tariffs are actually implemented and GDP impacted,” Lee said.
Upcoming Economic Data:
Important data is slated to be released this week that will help investors determine the future course of action.
- On Monday, the Empire State manufacturing survey data for December will be released at 8:30 a.m., ET.
- The S&P flash U.S. services and manufacturing PMI data for December will be released at 9:45 a.m., ET.
- 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.
- On Wednesday, housing starts, and building permit data for November will be announced at 8:30 a.m., ET.
- The FOMC’s interest rate decision will be announced at 2:00 p.m., ET, and the Fed Chair Jerome Powell’s press conference will begin at 2:30 p.m., ET.
- Micron Technology, Lennar, General Mills, and Toro will report earnings.
- On Thursday, the data for initial jobless claims till Dec. 14, GDP’s second revision for the third quarter and Philadelphia Fed manufacturing survey data for December will be released at 8:30 a.m., ET.
- Existing home sales data and U.S. leading economic indicators for November will be announced at 10:00 a.m., ET.
- Accenture, Nike, Cintas, FedEx, and Paychex will report earnings.
- On Friday, personal income and spending data along with core and headline PCE index data for November will be released at 8:30 a.m., ET.
- Consumer sentiment data for December will be released at 10:00 a.m., ET.
- Carnival Corporation and Winnebago Industries will report earnings.
Stocks In Focus:
- MicroStrategy Inc MSTR advanced 5.26%, Palantir Technologies Inc PLTR was up 0.78%, and Axon Enterprise Inc AXON rose by 3.12% in premarket trade as Nasdaq announced on Friday that these stocks will join the Nasdaq 100 index.
- Moderna Inc MRNA declined by 0.5%, Super Micro Computer Inc SMCI fell by 11.71% and Illumina Inc ILMN dropped by 0.99% in premarket after Nasdaq’s Friday announcement, booting these stocks off Nasdaq 100 index.
- Broadcom Inc AVGO was up 1.57%, continuing Friday’s upmove fueled by strong quarterly earnings and upbeat AI-driven guidance for the coming year. Friday’s rally propelled the chipmaker into the exclusive $1 trillion market-cap club, making it the eighth-largest publicly traded company.
- Tesla Inc TSLA was 1.07% up after Wedbush’s Dan Ives hiked its price target citing AI and autonomous opportunity worth $1 trillion.
- Amplitech Group Inc AMPG advanced 4.76% in premarket after it announced the sale of 1,352,500 shares of its common stock at $1.60 per share, totaling to price of $2.2 million.
- Checkpoint Therapeutics Inc CKPT was up 11.44% after the U.S. Food and Drug Administration approved UnloxcyT for the treatment of adults with metastatic cutaneous squamous cell carcinoma.
Commodities, Bonds And Global Equity Markets:
Crude oil futures were declining in the early New York session by 1.43% to hover around $70.27 per barrel.
The gold spot index rose by 0.08% to $2,677.91 per ounce. The Dollar Index was down 0.09% to 106.912 level.
Asian markets declined on Monday including Australia’s ASX 200, Hong Kong’s Hang Seng, China’s CSI 300, Japan’s Nikkei 225, India’s S&P BSE Sensex, and South Korea’s Kospi Index. Most European markets also fell except Spain’s IBEX 35.
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