S&P Futures Muted in Thin Post-Christmas Trade

March S&P 500 E-Mini futures (ESH26) are trending down -0.03% this morning as trading resumed after the Christmas holiday, with activity subdued and volumes expected to remain light ahead of a shortened New Year’s week.

Higher bond yields today are weighing on S&P 500 futures. The 10-year T-note yield rose two basis points to 4.15%.

In Wednesday’s trading session, Wall Street’s three main equity benchmarks closed higher, with the S&P 500 posting a new record high. Nike (NKE) climbed over +4% and was the top percentage gainer on the S&P 500 and Dow after a regulatory filing revealed that Apple CEO Tim Cook purchased 50,000 shares of the footwear maker. Also, some chip stocks advanced, with Micron Technology (MU) rising more than +3% to lead gainers in the Nasdaq 100 and Lam Research (LRCX) gaining over +1%. In addition, Dynavax (DVAX) jumped more than +38% after Sanofi agreed to acquire the vaccine maker for about $2.2 billion. On the bearish side, Intel (INTC) fell about -0.5% after Reuters reported that Nvidia had paused a test of using Intel’s manufacturing process to make advanced chips.

The Labor Department’s report on Wednesday showed that the number of Americans filing for initial jobless claims in the past week fell by -10K to 214K, compared with the 224K expected.

As traders digested the latest economic data, they maintained their view that the Fed will deliver two quarter-point rate cuts next year. Meanwhile, U.S. rate futures have priced in an 84.5% probability of no rate change and a 15.5% chance of a 25 basis point rate cut at January’s monetary policy meeting.

“The stock market is finally starting to eke out some gains for December after a choppy few weeks, and just in time for the market’s Santa Claus rally, which we expect to take place in its typical format,” said Paul Stanley at Granite Bay Wealth Management.

A Santa Claus rally refers to the consistent gains observed in the stock market over the final five trading days of December and the first two trading days of January. Since 1950, the S&P 500 has delivered an average return of 1.3%, posting gains 78% of the time, according to Adam Turnquist at LPL Financial.

In other news, China’s foreign ministry said on Friday it imposed sanctions on 10 individuals and 20 U.S. defense firms, including Boeing’s St. Louis unit, over arms sales to Taiwan. The measures freeze any assets the companies and individuals hold in China and prohibit domestic organizations and individuals from doing business with them.

The U.S. economic data slate is empty on Friday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.151%, up +0.51%.

Most major markets in Europe remain closed today for holidays.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.10%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.68%.

China’s Shanghai Composite Index reversed earlier losses and closed higher today, extending its winning streak to eight sessions. Gold mining stocks outperformed on Friday as gold prices climbed to a new record high. Steel stocks also advanced after China said on Friday it will continue to regulate crude steel output and ban the addition of illegal new capacity from 2026 to 2030. At the same time, technology stocks retreated as investors took profits following recent strong gains. Meanwhile, the benchmark index logged its strongest week in two months, and analysts expect the upward momentum to continue, supported by a strengthening yuan. The yuan posted its strongest official close in 2-1/2 years on Thursday and hovered just shy of the psychologically important 7-per-dollar level on Friday. The currency appreciation “is expected to whet foreign appetite for yuan assets, push up valuations and increase interbank liquidity,” according to Huatai Securities. In other news, Goldman Sachs Research’s Xinquan Chen said China’s central bank has hinted at potential monetary easing in the months ahead, noting that the PBOC adopted a measured easing tone in its fourth-quarter MPC meeting’s statement. In corporate news, Sichuan Swellfun Co. fell over -1% after the spirits maker denied media reports of a potential takeover by a rival firm. Investors now look ahead to China’s November industrial profits data, scheduled for release on Saturday, which will provide insight into how companies are coping with excess-capacity pressures.

Japan’s Nikkei 225 Stock Index closed higher today, led by gains in technology and healthcare stocks. The benchmark index notched a second consecutive weekly gain. Government data released on Friday showed that core consumer inflation in Japan’s capital eased in December as food cost pressures moderated, but remained above the Bank of Japan’s 2% target, keeping the central bank on course for further monetary tightening. The data supports the BOJ’s view that core inflation will dip below its 2% target in the coming months as cost pressures ease, before picking up again in a more demand-driven manner that would justify further rate hikes. The BOJ is expected to raise rates in July and December of 2026, according to a research note from two members of Barclays’ FICC Research. Separate data showed that Japan’s monthly industrial output fell more than expected in November amid the continued drag from U.S. tariffs, though companies expect output to rebound soon. In addition, data showed that retail sales growth slowed in November but was roughly in line with expectations. Meanwhile, Japan’s cabinet on Friday approved a record initial budget of about $785 billion for the next fiscal year, seeking to balance Prime Minister Sanae Takaichi’s proactive fiscal stance with concerns over ballooning debt by capping new bond issuance. New government bond issuance will increase only marginally from this year’s 28.6 trillion yen to 29.6 trillion yen. Notably, Japan’s finance ministry will issue the smallest amount of super-long government bonds in 17 years in the next fiscal year. The issuance plan helped push super-long JGB yields lower on Friday. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +15.98% to 21.77.

The Japanese December Tokyo Core CPI rose +2.3% y/y, weaker than expectations of +2.5% y/y.

The Japanese November Industrial Production (preliminary) fell -2.6% m/m, weaker than expectations of -1.9% m/m.

The Japanese November Retail Sales rose +1.0% y/y, stronger than expectations of +0.9% y/y.

The Japanese November Unemployment Rate was 2.6%, in line with expectations.

Pre-Market U.S. Stock Movers

Nvidia (NVDA) rose about +0.7% in pre-market trading after agreeing to a licensing deal with AI startup Groq.

Chip stocks are edging higher in pre-market trading. Micron Technology (MU) is up over +1%, and ON Semiconductor (ON) is up about +0.5%.

Gold mining stocks advanced in pre-market trading after gold prices climbed to a record high, with Freeport-McMoran (FCX) rising over +3% and Newmont (NEM) gaining more than +1%.

Coupang (CPNG) climbed more than +5% in pre-market trading after the South Korean e-commerce company said all customer data leaked in the breach had been deleted by the suspect.

Biohaven (BHVN) plunged over -14% in pre-market trading after its experimental treatment for depression failed to achieve the primary endpoint in a mid-stage study.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - December 26th

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