U.S. stock futures posted gains on Sunday ahead of a shortened trading week during Christmas, as traders deliberate whether tech stocks can regain lost footing by the end of the year.
Dow Jones Industrial Average futures rose 0.2%, while S&P 500 futures and Nasdaq 100 futures are up 0.2% and 0.3%, respectively. This follows a week of mixed results for the three major Wall Street averages.
Major U.S. Stock Futures Indexes Post Gains Ahead of Christmas Trading Week as Tech and AI Stocks Climb
A late surge for tech stocks last week helped lift the S&P 500 and Nasdaq Composite to their third successful week out of four, up 0.1% and 0.5%, respectively. However, the Dow, which has been outperforming its counterparts this month, saw its value dip 0.7% weekly.
Meanwhile, during Monday’s European session, the 30-stock Dow gained 0.14% to trade above 48,000 points. The S&P 500 and Nasdaq 100 futures also edged higher, up 0.35% and 0.53% to roughly 6,910 and 25,700 points, respectively. Nevertheless, trading volumes are expected to remain light this week, as the market enters the Christmas period, with the markets closing early on December 24 and remaining closed on Christmas Day.
During the previous regular session on Friday, the Dow Jones rose 0.38%, the S&P 500 advanced 0.88%, and the Nasdaq Composite jumped 1.31%, with megacaps extending their gains amid renewed optimism surrounding AI-related stocks.
AI shares enjoyed a late-week resurgence, with Oracle (ORCL) rallying after TikTok agreed to sell its U.S. business to a new joint venture that includes the company and Silver Lake. Chipmaking giant Nvidia (NVDA) also made a roaring comeback, helping lift broader tech indices despite recent underperformance across the sector.
However, investors are keeping a close watch on whether AI industry leaders can sustain their newfound momentum amid rotation into cheaper market segments and concerns about lofty tech valuations. Optimism surrounding a “Santa Claus rally” also subsided as the S&P 500 struggles to hold on to a key technical level.
A Santa Claus rally refers to a historical market pattern where stock prices tend to rise during the last five trading days of December and the first two trading days of January – spanning a period of seven trading days. Historical data shows the S&P 500 posting gains of about 76% to 79% during this period. However, the rally is not a guaranteed phenomenon, and does not always occur. In 2024, the S&P 500 experienced a major reversal rally, declining every trading day between Christmas and New Year’s.
Justin Bergner, portfolio manager at Gabelli Funds, suggested that the markets had already priced in their year-end gains “a couple of weeks ago,” and the current condition is the churning.
U.S. Exchanges NYSE and Nasdaq to Close Early on Dec 24, But Will Return to Regular Trading Schedule on Dec 26
The New York Stock Exchange and Nasdaq have both announced their schedules for the Christmas weekend. Both exchanges will close trading early on December 24 (Christmas Eve) at 1:00 pm ET, followed by a holiday on Christmas Day, before returning to the regular full trading schedule on December 26.
On Thursday, U.S. President Donald Trump issued an executive order directing all non-essential federal government operations to observe holidays on Christmas Eve (Wednesday) and December 26 (Friday), with their employees excused from duty, essentially creating a 5-day weekend.
The EO is only applicable to the public sector, as the private sector can operate as per its calendar. Banks and stock exchanges typically close early on December 24, except if Christmas Eve falls on a weekend, and observe a holiday on December 25.
