U.S. stocks could open on a weak note on Thursday after the averages closed at a record high on Wednesday. Futures of all three major indices were marginally down on Thursday, pointing to cautious sentiment on Wall Street.
The tentativeness in U.S. futures comes after Federal Reserve chair Jerome Powell tried to downplay expectations of swift rate cuts, citing a strong economy and uncertainty about inflation.
"The labor market is better, and the downside risks appear to be less in the labor market. Growth is definitely stronger than we thought, and inflation is coming [out] a little higher," Powell said during an interview at the New York Times' DealBook Summit on Wednesday.
"So, the good news is that we can afford to be a little more cautious as we try to find neutral."
However, CME Group's FedWatch tool shows that expectations of a 25-basis-point rate cut in December stand at 74%, up from 66.5% a week ago.
On Thursday, Bitcoin surged past $103,000 for the first time, with the cryptocurrency trading at $102,407 at the time of writing, according to data from Benzinga Pro.
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.10% |
| S&P 500 | -0.02% |
| Dow Jones | -0.01% |
| R2K | 0.06% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.03% to $607.46 and the Invesco QQQ ETF (NASDAQ:QQQ) declined 0.10% to $522.72, according to Benzinga Pro data.
Cues From Last Session:
U.S. stocks closed on a positive note on Wednesday, with all three major indices registering healthy gains. The Dow Jones settled above 45,000 for the first time, while the S&P 500 and Nasdaq solidified their gains.
Crude oil prices edged up on Thursday ahead of OPEC+ decision on production.
Treasury yields rose after jobs data revealed private payrolls came in lower than expected.
On the economic data front, U.S. private businesses added 146K workers to their payrolls for the month of November compared to a revised 184K gain in October, versus market estimates of 150K. U.S. factory orders rose by 0.2% from the previous month to $586.7 billion in October. The ISM services PMI fell to 52.1 in November compared to 56 in October and down from market estimates of 55.5.
Most sectors on the S&P 500 closed on a negative note, with energy, materials, and financial stocks recording the biggest losses on Wednesday.
However, consumer discretionary and information technology stocks bucked the overall market trend, closing the session higher.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 1.30% | 19,735.12 |
| S&P 500 | 0.61% | 6,086.49 |
| Dow Jones | 0.69% | 45,014.04 |
| Russell 2000 | 0.42% | 2,426.56 |
Insights From Analysts:
Analysts at BlackRock Investment Institute expect American companies to register growth in the upcoming year.
"Currently, across all the scenarios in the outlook, the platform is gravitating towards the US corporate strength scenario, which is another way of calling for US exceptionalism," said BlackRock Investment Institute's chief investment strategist Wei Li at a media roundtable on Wednesday, according to Yahoo Finance.
BlackRock strategists are not alone in their bullish outlook on US equities going into 2025.
Wells Fargo strategists also expect a bull run in 2025, giving a target of 7,007 for the S&P 500.
"On balance, we expect the Trump Administration to usher in a macro environment that is increasingly favorable for stocks at a time when the Fed will be slowly reducing rates," said Wells Fargo’s Christopher Harvey and his team of strategists.
Ryan Detrick, chief market strategist at Carson Group, explained why bears shouldn't bet against equities in December.
"When the S&P 500 was up 20% or more for the year heading into the final month, December has been up nine of the past 10 times," said Detrick in his latest note.
Detrick's analysis shows that big gains in November set equities on a path for a rally in the new year, too.
"Do big monthly gains matter? We'd say yes, as the S&P 500 is up an average of 13.5% a year later and higher nearly 84% of the time after a calendar month gain of more than 5%."
See Also: How To Trade Futures
Upcoming Economic Data
Thursday's economic calendar includes the release of initial jobless claims data for November and U.S. trade deficit data for October will be released at 8:30 a.m. ET.
Stocks In Focus:
- MicroStrategy Inc. (NASDAQ:MSTR) stock surged over 8% in premarket trading on Thursday, while Coinbase Global Inc. (NASDAQ:COIN) surged over 3% after Bitcoin (CRYPTO: BTC) hit the much-awaited $100,000 mark for the first time in its history late night on Wednesday.
- SentinelOne Inc. (NYSE:S) stock plunged 15% in premarket trading after the company missed earnings expectations.
- Synopsys Inc. (NASDAQ:SNPS) stock fell over 7% in premarket after the software provider's guidance missed estimates.
- Five Below Inc. (NASDAQ:FIVE) stock surged over 13% in premarket after the company raised guidance following strong Black Friday sales and a new CEO announcement.
- Investors are awaiting earnings results from Dollar General Corporation (NYSE:DG), Kroger Co. (NYSE:KR), and Lululemon Athletica Inc. (NASDAQ:LULU) today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures surged in the early New York session, gaining 0.50% to hover around $68.88 per barrel.
The 10-year Treasury note yield edged up to 4.207%.
Major Asian markets ended mixed on Thursday, while European markets were in the green in early trading.
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Photo courtesy: Wikimedia
