March S&P 500 E-Mini futures (ESH25) are up +0.14%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.18% this morning ahead of a holiday-shortened pre-Christmas trading session.
The U.S. stock markets will close early at 1 p.m. Eastern Time today and remain closed on Wednesday in observance of the Christmas holiday.
In yesterday’s trading session, Wall Street’s main stock indexes ended higher. Qualcomm (QCOM) rose over +3% after a U.S. federal jury ruled that the company’s central processors are properly licensed under its agreement with Arm Holdings. Also, chip stocks advanced, with GlobalFoundries (GFS) and Broadcom (AVGO) climbing more than +5%. In addition, Eli Lilly (LLY) gained over +3% after the FDA approved the company’s weight-loss drug Zepbound for moderate-to-severe obstructive sleep apnea in adults with obesity. On the bearish side, Walmart (WMT) dropped more than -2% and was the top percentage loser on the Dow after the Consumer Financial Protection Bureau filed a lawsuit against the retail giant and financial technology firm Branch for allegedly “taking advantage” of over one million delivery drivers.
Economic data released on Monday showed that the U.S. Conference Board’s consumer confidence index unexpectedly fell to 104.7 in December, weaker than expectations of 112.9. Also, U.S. November durable goods orders slipped -1.1% m/m, weaker than expectations of -0.3% m/m, while core durable goods orders, which exclude transportation, fell -0.1% m/m, weaker than expectations of +0.3% m/m. In addition, U.S. new home sales rose +5.9% m/m to 664K in November, just below the consensus estimate of 666K.
“The economic outlook is deteriorating,” said Neil Dutta at Renaissance Macro Research. “This was true before the Fed’s December confab and remains true after. The risk of the Fed flip-flopping is quite high.”
Meanwhile, U.S. rate futures have priced in a 91.4% chance of no rate change and an 8.6% chance of a 25 basis point rate cut at the conclusion of the Fed’s January meeting.
Today, investors will focus on the U.S. Richmond Fed Manufacturing Index, which is set to be released in a couple of hours. Economists estimate this figure to come in at -10 in December, compared to last month’s value of -14.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.594%, down -0.11%.
Europe’s Stoxx 50 index is up +0.28% this morning in quiet pre-holiday trading, with major markets like Germany shut and others, including London and Paris, set for early closures. Technology stocks led the gains on Tuesday, supported by the strong performance of their U.S. counterparts overnight. Meanwhile, investors continue to focus on the monetary policy outlooks of the European Central Bank and the Federal Reserve, along with the effects of U.S. tariffs on European manufacturing demand. ECB President Christine Lagarde said in an FT podcast released Monday, “We’re getting very close to that stage when we can declare that we have sustainably brought inflation to our medium-term 2%.” In other news, French Prime Minister Francois Bayrou stated that he intends to reach an agreement with parliament on a 2025 budget to bring the country’s deficit down to nearly 5%. In corporate news, Vistry Group Plc (VTY.LN) tumbled over -17% after the British homebuilder issued a profit warning for the third time this year.
The European economic data slate is empty on Tuesday.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.26%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.32%.
China’s Shanghai Composite Index closed higher today as sentiment was boosted by a report of Beijing’s planned record issuance of special treasury bonds for next year. Semiconductor stocks led the gains on Tuesday. The rally came even after the Biden administration announced a last-minute trade investigation into older China-made “legacy” semiconductors, which could result in additional U.S. tariffs on Chinese chips. Bank stocks also advanced as falling bond yields led investors to continue seeking shelter in assets with high dividend yields. Meanwhile, China’s finance ministry reiterated on Tuesday that the government will enhance fiscal support for the economy in 2025. The ministry reaffirmed plans to increase government spending to stimulate consumption and demand in the world’s second-largest economy, according to a statement. Reuters reported on Tuesday that Chinese policymakers agreed to issue 3 trillion yuan ($411 billion) in special treasury bonds in 2025, which would be the highest on record. In other news, Chinese state media reported that foreign institutions remain optimistic about China’s capital market for 2025, expecting a gradual stabilization of the economy. In corporate news, GCL Energy Technology gained more than +5% after reports emerged that the electric services provider would collaborate with Ant Group’s AntChain blockchain technology unit on a real-world asset tokens project. Investors are now awaiting the People’s Bank of China’s decision on the one-year Medium-Term Lending Facility rate later this week.
Japan’s Nikkei 225 Stock Index closed lower today in thin pre-holiday trading. Technology and electronics stocks weighed on the index on Tuesday. The minutes of the Bank of Japan’s October 30-31 meeting, released Tuesday, revealed that policymakers agreed to continue to raise interest rates if the economy progresses in line with their forecast, though some emphasized the need for caution amid uncertainty regarding U.S. economic policy. “Many members said the BOJ must continue to scrutinize developments in overseas economies, including that of the United States, and markets,” the minutes showed. Meanwhile, the yen wavered amid thin trading volumes as Japanese Finance Minister Katsunobu Kato cautioned against excessive foreign exchange movements. In corporate news, Honda Motor surged more than +12% after announcing plans to repurchase up to 1.1 trillion yen ($7 billion) worth of its shares and merge with Nissan Motor in 2026. Investor attention is now on BOJ Governor Kazuo Ueda’s speech on Wednesday and the BOJ’s Summary of Opinions set for release on Friday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -16.16% to 18.31.
Pre-Market U.S. Stock Movers
NeueHealth (NEUE) jumped about +61% in pre-market trading after the company announced that it had agreed to be taken private by New Enterprise Associates at an enterprise value of about $1.3 billion.
International Seaways (INSW) climbed more than +8% in pre-market trading after S&P Dow Jones Indices announced that the stock would be added to the S&P SmallCap 600 index next week.
Avita Medical (RCEL) gained over +3% in pre-market trading after obtaining supplemental FDA approval for its RECELL GO mini disposable cartridge, designed for treating smaller wounds.
Vertical Aerospace (EVTL) advanced more than +5% in pre-market trading after the company finalized an investment agreement with Mudrick Capital Management for up to $50 million in new funding.
U.S. Steel (X) fell over -2% in pre-market trading after Nippon Steel’s $15-billion bid for the company was referred to U.S. President Joe Biden, who has long opposed the merger.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - December 24th
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