March S&P 500 E-Mini futures (ESH26) are up +0.31%, and March Nasdaq 100 E-Mini futures (NQH26) are up +0.54% this morning, pointing to a higher open on Wall Street as the tech-driven rally looks set to carry into the holiday-shortened trading week.
Futures on the Nasdaq 100 outperformed amid renewed appetite for technology stocks, boosting hopes for a “Santa Claus” rally. Most members of the Magnificent Seven stocks advanced in pre-market trading, with Tesla and Nvidia rising over +1%. Chip stocks also gained ground in pre-market trading, led by a more than +3% rise in Micron Technology.
However, higher bond yields today are limiting gains in stock index futures. The 10-year Treasury yield rose 2 basis points to 4.17% on negative carryover from a jump in 10-year Japanese bond yields to the highest level since February 1999 following the Bank of Japan’s rate hike on Friday.
This week, investors will focus on a few U.S. economic data releases.
In Friday’s trading session, Wall Street’s major equity averages ended in the green. Carnival (CCL) surged over +9% and was the top percentage gainer on the S&P 500 after the cruise company posted better-than-expected Q4 adjusted EPS and issued above-consensus FY26 adjusted EPS guidance. Also, chip stocks rallied, with Micron Technology (MU) climbing about +7% to lead gainers in the Nasdaq 100 and Advanced Micro Devices (AMD) rising more than +6%. In addition, Oracle (ORCL) advanced over +6% after the company and two other investors signed agreements with TikTok and its Chinese parent ByteDance to establish a new joint venture called TikTok USDS Joint Venture LLC. On the bearish side, Nike (NKE) plunged more than -10% and was the top percentage loser on the Dow after the company said it expects sales to drop by a low single-digit percentage in the current quarter amid ongoing weakness in China and at its Converse brand.
“The trend remains positive, and a Santa Claus rally into the year-end won’t surprise anyone. I am expecting nothing less than a strong finish to the year and a strong start to 2026,” said Louis Navellier at Navellier & Associates. Notably, since 1928, the S&P 500 has advanced 75% of the time during the final two weeks of December, averaging a 1.3% gain, according to data from Citadel Securities.
Economic data released on Friday showed that U.S. existing home sales rose +0.5% m/m to a 9-month high of 4.13 million in November, but came in below expectations of 4.15 million. At the same time, the University of Michigan’s U.S. December consumer sentiment index was unexpectedly revised lower to 52.9, weaker than expectations of 53.5.
New York Fed President John Williams said on Friday there is no urgency to lower interest rates again, given recent jobs and inflation data, reinforcing expectations for a pause after the central bank cut rates at its last three meetings. “I don’t personally have a sense of urgency to need to act further on monetary policy right now, because I think the cuts we’ve made have positioned us really well,” Williams said. He added that there are “no signs of a sharp deterioration at all” in the labor market.
Cleveland Fed President Beth Hammack said in an interview with The Wall Street Journal published on Sunday that she sees no need to change interest rates for several months following a series of recent cuts. “My base case is that we can stay here for some period of time, until we get clearer evidence that either inflation is coming back down to target or the employment side is weakening more materially,” Hammack said.
U.S. rate futures have priced in an 80.1% chance of no rate change and a 19.9% chance of a 25 basis point rate cut at the conclusion of the Fed’s January meeting.
Meanwhile, the U.S. stock markets will close early at 1 p.m. Eastern Time on Wednesday for Christmas Eve and remain closed on Thursday for Christmas Day.
In this holiday-shortened week, investors will be monitoring several key U.S. economic data releases. A trio of reports delayed by the government shutdown are scheduled for release this week, with the initial estimate of third-quarter gross domestic product taking center stage. “We believe the latest numbers point to the U.S. economy being in a good place, but risks remain. Surveys point to unease among households about job-market prospects, and there have been numerous high-profile job cut announcements citing AI and cost cuts,” analysts at BNP Paribas said in a note. Notably, the Commerce Department will not release third-quarter GDP in its usual sequence of three successive estimates and will instead publish only two readings. The final estimate is slated to be released on January 22nd. U.S. Durable Goods Orders data for October, along with the Fed’s industrial production reports for both October and November, will also attract attention. Other noteworthy data releases include the Conference Board’s Consumer Confidence Index, the Richmond Fed Manufacturing Index, and Initial Jobless Claims.
The U.S. economic data slate is empty on Monday.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.17%, up +0.68%.
The Euro Stoxx 50 Index is down -0.22% this morning, taking a breather as markets head into a holiday-shortened week ahead of Christmas. Food and beverage stocks underperformed on Monday, while mining and technology stocks advanced. Trading conditions are likely to stay muted this week, as the calendar is shortened by the Christmas holiday, with most major European stock exchanges shut on Thursday and Friday. Final data from the Office for National Statistics confirmed on Monday that the U.K. economy expanded by just 0.1% in the third quarter from the prior quarter. Although growth was unrevised, the “shape of growth is a bit healthier and less reliant on the public sector than previously estimated,” said Capital Economics economist Alex Kerr. Meanwhile, European Central Bank Governing Council member Peter Kazimir said on Monday that the ECB is comfortable with the Eurozone inflation outlook, but stands ready to act again if necessary. “The coming year is likely to bring new challenges that households, firms, and indeed our policy may have to respond to. We remain flexible and ready to step in should future developments warrant fresh action,” Kazimir said. On the geopolitical front, focus remains on efforts to bring an end to the war in Ukraine. In corporate news, Abivax (ABVX.FP) jumped over +10% after fresh reports revived speculation that Eli Lilly was exploring a takeover of the biotech firm.
U.K. GDP data was released today.
U.K. GDP has been reported at +0.1% q/q and +1.3% y/y in the third quarter, in line with expectations.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.69%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.81%.
China’s Shanghai Composite Index closed higher today, lifted by indications of continued capital inflows and the creation of a free trade port in Hainan. Latest data showed that China’s private fund sector grew to a record 22.1 trillion yuan in November, supported by strong inflows into equities. Sentiment was also aided by a jump in Hainan stocks after China last week began operating the Hainan Free Trade Port. Chip and other AI-related stocks also gained ground. Meanwhile, China left its benchmark lending rates unchanged for a seventh straight month on Monday, in line with expectations, as the world’s second-largest economy remains on course to meet its annual growth target. The one-year LPR remained at 3.00%, while the five-year LPR was kept at 3.50%. In other news, Reuters reported that China Vanke narrowly avoided a default on Monday after onshore bondholders approved a plan to extend the grace period on a 2 billion yuan bond repayment to 30 trading days. In corporate news, Moore Threads Technology rose over +1% after the chip designer introduced a range of new products, including its next-generation chip architecture and AI chips. Investors are now awaiting China’s industrial profits data for November later this week, which will offer insight into how companies are coping with excess-capacity pressures.
Japan’s Nikkei 225 Stock Index closed sharply higher today, reclaiming the 50,000-point level. Japanese equities were buoyed by a weaker yen and Friday’s rally on Wall Street. Technology stocks were among the biggest gainers on Monday, with SoftBank Group rising over +4% after Reuters reported that the company was pushing to finalize a $22.5 billion funding commitment to OpenAI by year-end. Meanwhile, Japanese government bonds fell further on Monday, with the 10-year yield reaching a 26-year high, following the Bank of Japan’s rate hike on Friday. The rise in government bond yields was also partly driven by speculation that the BOJ may need to hike interest rates more aggressively to curb persistent yen weakness. JPMorgan expects two rate hikes next year, one in April and another in October, which would lift the policy rate to 1.25% by the end of 2026. Investors anticipate that Prime Minister Sanae Takaichi will “allow the BOJ to further raise interest rates if it is to curb the yen’s depreciation, which is the administration’s greatest fear in order to maintain its high approval ratings,” according to Ryutaro Kimura, a senior fixed-income strategist at AXA Investment Managers. The Japanese currency, which had fallen to as low as 157.78 per dollar, regained some footing on Monday after Finance Minister Satsuki Katayama and top currency official Atsushi Mimura issued warnings on recent moves. Investor attention this week is on a raft of Japan’s economic data, including Tokyo core CPI, industrial production, retail sales, and employment figures. Investors will also focus on Bank of Japan Governor Kazuo Ueda’s speech this week, as they seek guidance on the central bank’s policy path. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.14% to 25.36.
Pre-Market U.S. Stock Movers
Most members of the Magnificent Seven stocks advanced in pre-market trading, with Tesla (TSLA) and Nvidia (NVDA) rising over +1%.
Chip stocks are moving higher in pre-market trading, with Micron Technology (MU) rising over +3% and KLA Corp. (KLAC) gaining nearly +2%.
Cryptocurrency-exposed stocks gained ground in pre-market trading, with the price of Bitcoin up more than +1%. Strategy (MSTR) is up more than +3%. Also, MARA Holdings (MARA) is up over +2%, and Coinbase (COIN) is up more than +2%.
UniFirst Corporation (UNF) soared over +33% in pre-market trading after The Wall Street Journal reported that Cintas has submitted a new offer to acquire the company for $275 per share in cash.
Clearwater Analytics (CWAN) climbed more than +8% in pre-market trading after agreeing to an $8.4 billion takeover by a private equity consortium led by Permira and Warburg Pincus.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - December 22nd
Ennis (EBF), Calavo Growers (CVGW), Immersion Corp (IMMR), RCI Hospitality (RICK).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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