Stocks See Support As Year-End Bullish Sentiment Continues

The S&P 500 Index ($SPX) (SPY) today is up +0.04%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.12%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.09%.  March E-mini S&P futures (ESH26) are up +0.04%, and March E-mini Nasdaq futures (NQH26) are up +0.11%.

The S&P 500 index today edged to a new record high.  Stocks are seeing support from year-end optimism and today’s -1.0 bp decline in the 10-year T-note yield.  Stocks also have support from confidence about the US economic outlook after Tuesday’s news that US Q3 real GDP rose by +4.3% (q/q annualized), much stronger than market expectations of +3.3%. 

Gold, silver, and platinum reached new all-time highs today on dollar weakness and geopolitical concerns, with the US striking targets in Nigeria and with ongoing Venezuelan tensions.  The dollar index is trading slightly lower today.

The US on Thursday launched strikes on ISIS targets in Nigeria in a security and intelligence collaboration with the Nigerian government to combat rising terrorist attacks in the country.  Nigeria is an OPEC member.  Mr. Trump previously warned that the US would strike ISIS in Nigeria if the group did not stop killing Christians.

The US Coast Guard forced the sanctioned oil tanker Bella 1 to turn away from Venezuela and head out into the Atlantic Ocean, according to a Bloomberg report.  US forces have been shadowing the vessel for several days as part of President Trump’s blockade on sanctioned oil tankers connected with Venezuela.  US forces wanted to board Bella 1 near Barbados on Sunday, but the vessel instead moved back out into the Atlantic Ocean.

There may be some progress on a Ukraine-Russia peace deal as Ukrainian President Zelensky said he expects to meet with President Trump on Sunday in Florida.  Mr. Zelensky recently said Ukraine might be willing to accept a peace deal involving a demilitarized zone in its eastern region in return for security guarantees from the US and Europe.

Seasonal factors are bullish for stocks.  According to data from Citadel Securities, since 1928, the S&P 500 has risen 75% of the time in the last two weeks of December, climbing 1.3% on average.

The markets are discounting the odds at 18% for a -25 bp rate cut at the FOMC’s next meeting on Jan 27-28.

Overseas stock markets are higher.  The Euro Stoxx 50 today was closed on Friday as part of the Christmas holidays.  China’s Shanghai Composite closed up +0.10% for the eighth consecutive daily gain.  Japan’s Nikkei Stock 225 closed up +0.68%.

Interest Rates

March 10-year T-notes (ZNH6) are up +4 ticks.  The 10-year T-note yield is down -1.0 bp to 4.124%.  T-note prices are seeing some support from today’s -1.6% decline in crude oil prices and the -0.3 bp decline in the 10-year breakeven inflation expectations rate to 2.237%.

European government bond markets are closed as part of the Christmas holidays.

Swaps are discounting a 4% chance of a +25 bp rate hike by the ECB at its next policy meeting on February 5.

US Stock Movers

The Magnificent Seven stocks today are mixed.  Nvidia (NVDA) is up +1.4% and Apple (AAPL)is up +0.3%, but Tesla (TSLA)is down -1.6%, and the other Magnificent Seven are trading mildly lower. 

Nvidia (NVDA) is up +1.4% after news of a licensing deal with AI startup Groq as a means to put Groq’s AI inference and low-latency chip technology into Nvidia’s product lineup.

Chip stocks are trading mostly higher, with leadership from Nvidia.  Lam Research (LRCX) and Asml (ASML)are up more than +0.6%. However, GlobalFoundries (GFS) is down more than -1.0%.

Cryptocurrency-exposed stocks are trading lower, with Bitcoin (^BTCUSD) today down -0.8%.  Mara Holdings (MARA)is down more than -4%, Galaxy Digital Holdings (GLXY) is down more than -3%, and Riot Platforms (RIOT) is down more than -2%.  Coinbase Global (COIN) is down -1.5%.

Energy companies are trading mostly lower due to today’s -1.6% decline in Feb WTI crude oil futures.  Devon Energy (DVN) is down more than -1%, and Diamondback Energy (FANG) is down about -1%. 

Mining companies are seeing support today, with gold, silver, and platinum posting record highs, and copper trading higher. Freeport McMoRan (FCX) is up more than +3%, Coeur Mining (CDE) is up more than +2%, and Newmont (NEM) is up more than +1%.

Target (TGT) is up by more than 1% after the Financial Times reported that activist investor Toms Capital Investment Management has built up a stake in the retailer.

Earnings Reports(12/26/2025)

None.