Stock Index Futures Slip on Pressure from Rising Bond Yields

March S&P 500 E-Mini futures (ESH25) are down -0.36%, and March Nasdaq 100 E-Mini futures (NQH25) are down -0.40% this morning, following Thursday’s muted session on Wall Street, as rising Treasury yields dampened risk appetite.

In yesterday’s trading session, Wall Street’s major indexes ended mixed, with the blue-chip Dow notching a 1-week high. Retail stocks advanced amid early reports of strong holiday sales, with Target (TGT) and Dollar Tree (DLTR) rising over +3%. Also, UnitedHealth Group (UNH) gained +1% after Raymond James added the stock to its “Favorites List.” In addition, GameStop (GME) climbed more than +5% following a post on X by Keith Gill, who is recognized online as Roaring Kitty. On the bearish side, cryptocurrency-exposed stocks came under pressure after Bitcoin fell over -3%, with Microstrategy (MSTR) sliding more than -4% to lead losers in the Nasdaq 100.

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week unexpectedly fell by -1K to a 1-month low of 219K, compared with the 223K expected.

“Eco data is a non-event until we move into the new year,” said Kenny Polcari at SlateStone Wealth. “Christmas is behind us, but the New Year is ahead of us. Volumes will remain muted.”

With the economy showing resilience, investors worry that President-elect Donald Trump’s policies, potentially involving tariffs and tax cuts, could stoke inflation, prompting the Fed to adopt a more hawkish stance.

Meanwhile, U.S. rate futures have priced in an 89.3% chance of no rate change and a 10.7% chance of a 25 basis point rate cut at the January FOMC meeting.

Today, investors will focus on U.S. Wholesale Inventories data, which is set to be released in a couple of hours. Economists expect the preliminary November figure to be +0.1% m/m, compared to +0.2% m/m in October.

U.S. Crude Oil Inventories data will be released today as well. Economists estimate this figure to be -0.700M, compared to last week’s value of -0.934M.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.609%, up +0.66%.

The Euro Stoxx 50 futures are up +0.72% this morning as trading resumed after a two-day holiday. Bank and healthcare stocks led the gains on Friday. Meanwhile, with 2025 nearing, investor focus remains on the monetary policy outlooks of the European Central Bank and Federal Reserve and possible tariff changes under the incoming administration of U.S. President-elect Donald Trump. In corporate news, Delivery Hero Se (DHER.D.DX) slid over -4% after Taiwan’s antitrust regulator blocked the sale of its Foodpanda business to Uber Technologies.

The European economic data slate is mainly empty on Friday.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.06%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.80%.

China’s Shanghai Composite Index closed slightly higher today as investors digested industrial profit data from the country. Property and building material stocks outperformed on Friday. At the same time, semiconductor stocks lost ground. The benchmark index ended the final week of the year higher, supported by expectations of robust 2025 fiscal spending in China. Data from the National Bureau of Statistics released on Friday showed that China’s industrial profit fell in November, albeit at a slower pace, as Beijing took steps to boost domestic demand. Industrial profits dropped 7.3% in November from a year earlier, showing an improvement from October’s 10.0% decline. Meanwhile, market participants are shifting their focus to China’s PMI data for December, scheduled for release early next week. In other news, the World Bank on Thursday raised its economic growth forecast for China to 4.9% in 2024 and 4.5% in 2025, though it cautioned that the country’s economy would continue to face challenges. In corporate news, Kuang-Chi Technologies climbed over +6% on plans to set up a research and development base for unmanned aerial vehicles in the Chinese city of Leshan in Sichuan Province.

Japan’s Nikkei 225 Stock Index closed sharply higher and hit a 5-month high today as a weaker yen fueled broad-based gains. Electronics stocks led the gains on Friday. The benchmark index posted the strongest weekly performance since September. Government data released on Friday showed that core inflation in Japan’s capital picked up for the second consecutive month in December, keeping market expectations for an imminent interest rate hike alive. Separately, government data showed that Japan’s retail sales grew at the fastest pace in November since August, while industrial output fell less than expected. Meanwhile, a summary of opinions from the Bank of Japan’s December meeting revealed mixed views among its board members regarding the timing of another rate hike, largely due to uncertainties surrounding the U.S. economy. “The bank will likely decide to raise the policy interest rate in the near future, but at this point, it is necessary for the bank to be patient and monitor the uncertainties over the U.S. economy until those uncertainties subside,” one board member said. The yen rebounded slightly on Friday after Japanese Finance Minister Katsunobu Kato stated that the government would take appropriate steps against excessive fluctuations in the foreign exchange market. In other news, Japanese Prime Minister Shigeru Ishiba’s cabinet on Friday approved a record $730 billion budget for the upcoming fiscal year while reducing new bond issuance to the lowest level in 17 years due to record tax revenue. In corporate news, Nidec Corp. gained over +4% following its plans to launch a 257 billion yen ($1.6 billion) bid for Makino Milling Machine. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +0.73% to 20.80.

The Japanese December Tokyo Core CPI came in at +2.4% y/y, weaker than expectations of +2.5% y/y.

The Japanese November Industrial Production (preliminary) stood at -2.3% m/m, stronger than expectations of -3.4% m/m.

The Japanese November Retail Sales arrived at +2.8% y/y, stronger than expectations of +1.5% y/y.

The Japanese November Unemployment Rate was 2.5%, in line with expectations.

Pre-Market U.S. Stock Movers

Cryptocurrency-exposed stocks are moving higher in pre-market trading, with the price of Bitcoin up more than +1%. MicroStrategy (MSTR) is up more than +1%. Also, MARA Holdings (MARA) is up about +0.8%, and Bit Digital (BTBT) is up nearly +1%.

American Battery Technology (ABAT) soared about +21% in pre-market trading after announcing securities purchase agreements with two institutional investors for the purchase and sale of about 3.77 million shares and warrants.

Crown Electrokinetics Corp. (CRKN) surged more than +31% in pre-market trading after the company issued solid full-year revenue guidance. 

Viracta Therapeutics (VIRX) slumped over -8% in pre-market trading after announcing the termination of its ongoing Nana-val trial and that its board has begun a process to explore strategic options.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - December 27th

None.