Stock Index Futures Slip in Weak End to a Banner Year

March S&P 500 E-Mini futures (ESH26) are down -0.20%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.32% this morning, pointing to a weak start on Wall Street in the final trading session of 2025.

Technology stocks weighed on stock index futures, with most members of the Magnificent Seven edging lower in pre-market trading. However, lower bond yields today are limiting losses in equity futures.

The benchmark S&P 500 index is set to end 2025 up about +17%, marking a third consecutive year of double-digit gains. The blue-chip Dow and tech-heavy Nasdaq 100 indexes are poised to end the year higher by about +13.5% and +21%, respectively. U.S. equities soared to record highs in 2025 as optimism around economic growth, corporate earnings, and a more accommodative monetary policy fueled a rebound from the April downturn triggered by President Donald Trump’s tariffs. 

The U.S. stock and bond markets will be closed on Thursday for the New Year’s Day holiday. Also, the U.S. bond market will close early at 2 p.m. Eastern Time today for New Year’s Eve.

In yesterday’s trading session, Wall Street’s major indexes closed lower. Some chip stocks retreated, with KLA Corp. (KLAC) and Applied Materials (AMAT) falling over -1%. Also, pharmaceutical stocks lost ground, with Gilead Sciences (GILD) and Vertex Pharmaceuticals (VRTX) dropping more than -1%. In addition, Citigroup (C) slipped about -0.8% after it said it expects to record a roughly $1.1 billion after-tax loss on the sale of its remaining business in Russia to Renaissance Capital. On the bullish side, Molina Healthcare (MOH) rose over +2% after famed investor Michael Burry reaffirmed his bullish stance on the stock.

“Wall Street is rounding out the year in a subdued fashion, capping a good year for stocks, albeit one that included a nervous moment or two,” according to Kyle Rodda, senior analyst at Capital.com. “The markets are pricing in a pretty much close to perfect set of circumstances going into next year.”

Economic data released on Tuesday showed that the U.S. Chicago PMI rose to 43.5 in December, stronger than expectations of 39.8. Separately, the U.S. October S&P/CS HPI Composite - 20 n.s.a. eased to +1.3% y/y from +1.4% y/y in September, stronger than expectations of +1.1% y/y.

The minutes of the Federal Open Market Committee’s December 9-10 meeting, released on Tuesday, showed that most officials view additional interest-rate cuts as appropriate if inflation continues to ease as expected over time. At the same time, some officials said it would “likely be appropriate to keep the target range unchanged for some time” after December’s cut. The minutes continued to highlight divisions among policymakers and the difficulty of their most recent decision. While most officials backed this month’s rate cut, some of those officials “indicated that the decision was finely balanced or that they could have supported keeping the target rate unchanged.” Other officials opposed December’s rate cut, voicing concern that the Fed’s efforts to bring inflation back to the 2% target stalled this year.

The minutes reinforced expectations for further rate cuts next year, with investors anticipating at least two reductions. Meanwhile, U.S. rate futures have priced in an 82.8% chance of no rate change and a 17.2% chance of a 25 basis point rate cut at the January FOMC meeting.

Today, investors will focus on U.S. Initial Jobless Claims data, which is set to be released in a couple of hours. Economists estimate this figure will come in at 219K, compared to last week’s number of 214K.

The EIA’s weekly crude oil inventories report will also be released today. Economists expect this figure to be 0.5 million barrels, compared to the previous value of 0.4 million barrels.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.113%, down -0.39%.

The Euro Stoxx 50 Index is down -0.22% this morning in thin trading ahead of the New Year holiday, with markets in Germany, Italy, and Switzerland among those closed on New Year’s Eve, while exchanges in London and Paris have shortened sessions. Technology and mining stocks retreated on Wednesday. The benchmark index is poised to finish 2025 up around 18%, supported by resilient economic growth and the prospect of higher fiscal spending in the region. Banks have been the top-performing sector, on track for their strongest showing since 1997. Analysts point to increased merger-and-acquisition activity, a more accommodating regulatory environment, and relatively stable economic conditions as key drivers of the gains. Meanwhile, Danni Hewson, head of financial analysis at AJ Bell, said European stocks should carry their momentum into the new year. “Investors have been looking beyond the usual suspects for value and diversification as the U.S. dollar came under pressure and the world continued to be beset with geopolitical turmoil and fears of an AI bubble,” Hewson said. In corporate news, Seplat Energy Plc (SEPL.LN) surged over +7% after Maurel & Prom sold a stake in the energy company at a premium.

The European economic data slate is empty on Wednesday.

China’s Shanghai Composite Index (SHCOMP) closed up +0.09%, while Japanese financial markets were closed for a holiday.

China’s Shanghai Composite Index closed higher today as investors digested upbeat PMI data from the country. Defense stocks were among the biggest gainers on Wednesday. An official survey released on Wednesday showed that China’s manufacturing activity unexpectedly returned to expansion territory in December, snapping a record eight straight months of contraction, supported by a pickup in pre-holiday orders. China’s non-manufacturing PMI, which covers both services and construction activity, also rebounded in December after contracting in November for the first time in nearly three years. A separate private survey also indicated a return to growth in factory activity in December, driven by stronger production and domestic demand amid a lack of more foreign orders. Chinese President Xi Jinping said on Wednesday that China is on track to meet its economic targets for 2025, with growth expected to hit “about 5%,” offering an upbeat backdrop to the PMI data. Meanwhile, the benchmark index climbed 18% for the year, marking its strongest performance since 2019. Chinese markets have navigated a Sino-U.S. trade war and escalating geopolitical tensions in a volatile year, with stocks supported by government stimulus, growing confidence in Chinese technology, and a strengthening yuan. State media reported President Xi Jinping as saying on Wednesday that China will roll out more proactive policies in 2026 aimed at supporting long-term growth. China’s state planner has also unveiled early investment plans for 2026, including two major construction projects.

Mainland China’s financial markets will be closed on Thursday and Friday for the New Year holidays.

The Chinese December Manufacturing PMI came in at 50.1, stronger than expectations of 49.2. 

The Chinese December Non-Manufacturing PMI arrived at 50.2, stronger than expectations of 49.6.

The Chinese December RatingDog Manufacturing PMI stood at 50.1, stronger than expectations of 49.8.

Japan’s Nikkei 225 Stock Index was closed today for the New Year holidays. The markets will reopen on Monday, January 5th.

Pre-Market U.S. Stock Movers

Most members of the Magnificent Seven stocks are edging lower in pre-market trading, with Alphabet (GOOGL) falling -0.4% and Meta Platforms (META) dropping -0.3%.

GlobalFoundries (GFS) fell more than -2% in pre-market trading after Wedbush downgraded the stock to Neutral from Outperform.

Nike (NKE) gained over +1% in pre-market trading after a regulatory filing showed that CEO Elliott Hill bought nearly $1 million worth of the footwear maker’s shares on Monday.

Vanda Pharmaceuticals (VNDA) jumped more than +22% in pre-market trading after the Food and Drug Administration approved Nereus for the prevention of motion-induced vomiting.

Anghami (ANGH) soared over +68% in pre-market trading after the company said its revenue nearly doubled in the first half of 2025, driven by subscriber growth.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - December 31st

Immersion Corp (IMMR), RCI Hospitality (RICK), Coffee Holding (JVA), Brookmount Explorations (BMXI).