Dow Jones futures rise 0.25%, above 42,680 points, the S&P 500 rises 0.3%, to 5,924 points and the NASDAQ 100 rises 0.39%, its futures move at 21,276 points.
In the year, the S&P has risen more than 23.8%putting it solidly on track for its second consecutive gain above 20%. The Dow Jones Industrial Average has added almost 13%, while The Nasdaq Composite has outperformed with a gain of 29.8%.
In the last quarter alone, the Nasdaq and S&P are up 7.1% and 2.5%, respectively, and are both on track for a fifth consecutive positive quarter for the first time since 2021. The Dow is up just 0 .6% in the same period for its fourth positive quarter in five.
Yet, Wall Street enters the last session of the year with a certain bitter taste as it has lost part of the momentum in recent sessions. December has been a weak month for equities with investors taking profits from markets that have been the biggest winners of 2024. The Dow is down 5.2% in its worst month since September 2022. The Nasdaq is up 1.4%, while the S&P is down 2.1% and heading for its worst month since April.
loss of momentum has dashed investors’ hopes for a Santa Claus rallywhich occurs when the market rises during each of the last five trading days of a calendar year and the first two trading days of January. Instead, the S&P 500 has fallen at least 1% over each of the last two trading days.
However, it cannot be ignored that 2024 can be classified as a historic year. For several reasons:
The history surrounding AI and its potential increased productivity has driven significant gains for the major averages throughout the year, pushing up both the “Magnificent Seven” stocks, AI chip darling Nvidia, and iPhone giant Apple to new highs. Mega-cap tech gains also lifted major averages to record levels.
Shares have also benefited from path to lower interest rates by the Federal Reservefollowing one of its most aggressive hike cycles in recent history, which has raised hopes of a period of economic growth as borrowing costs decline. Since September, the central bank has lowered rates by 100 basis points. Although more rate cuts are expected in the new year, the Fed’s pace may slow from initial expectations.
Besides, President-elect Donald Trump’s successful re-election campaign in November also turned out to be a boon for the market, fueling hopes for deregulation, lower corporate tax rates and a focus on the U.S. economy, which has remained resilient. Expectations of a cryptocurrency-friendly administration have served to push bitcoin to record levels above $108,000 while Tesla was another of the winners of Trump’s victory due to its link (and especially its support) to the Republican candidate. .
In today’s session, we will be watching Tesla, which has announced that it will repair the software of 77,650 Model 3 and Model Y cars manufactured in China for safety reasons, as reported on Tuesday by the Chinese market regulator. The move, due to software issues that may cause the monitored tire pressure to not be displayed immediately after the vehicle is started, is described as a product recall under Chinese regulations, the regulator said. It was not immediately clear if drivers would have to return the vehicles to Tesla for a refund or if they would be eligible.
A shareholder in agribusiness Archer-Daniels Midland is pressuring the company’s chief executive to resign for failing to clearly inform investors about problems with its internal accounting practices that have triggered a criminal investigation first reported by Reuters. In a LinkedIn post titled “Investor misery has a name: ADM,” Hartwig Fuchs said ADM was the worst stock in his portfolio this year and blamed ADM CEO Juan Luciano.
Bond yields down, oil up, dollar flat
U.S. Treasury yields fell on Tuesday, the last trading day of the year, as investors considered the outlook for 2025. The 10-year Treasury yield falls more than two points, to 4.5187% while the yield of the two-year treasury bond falls to 4.2333%.
In raw materials markets, oil prices rise in the last session of the year after data showed China’s manufacturing activity expanded in December. However, they are on track to close lower for the second consecutive year due to concerns about demand in the main consuming countries. The Brent oil future rises 0.6%, above 74.50 euros, while West Texas advances 0.8%, to 71.59 dollars.
In the currency market, the Euro Dollar rises timidly against the dollar, up to 1.0415 dollars. Since the September lows, the dollar index has advanced 7.5% and has touched its highest levels in the last two years (since November 2022) in recent sessions. A movement that highlights the solidity of the growth of the US economy. And also the change in perspectives on monetary policy that the Fed will implement in 2025.
In the crypto market, Bitcoin advances 0.21%, above $94,121, while Ethereum gives up just over half a percentage point, above $3,394.