(Bloomberg) — US equity futures gained, setting stocks on course to end three days of losses and build on this year’s powerful Wall Street rally in the final session of 2024.
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Contracts for the S&P 500 and the tech-heavy Nasdaq 100 were about 0.3% higher, signaling a partial rebound from Monday’s declines of more than 1%. European trading was muted, with several markets shut on New Year’s Eve and shortened sessions in London and Paris.
As equities look to end the year on a positive note, investors have much to ponder. Some are concerned about the stamina of the S&P 500’s 24% rally, driven by the so-called Magnificent Seven cohort of tech giants. And there’s a range of uncertainties to confront in 2025, from President-elect Donald Trump’s protectionist policies to the outlook for central bank policy and the health of the European and Chinese economies.
The Bloomberg Dollar Spot Index rose, on course for its best year since 2015 in a rally fueled by Trump’s reelection in November and the Federal Reserve’s less dovish policy pivot. An index of Treasuries looks set to eke out a small gain for the year, with yields edging lower on Tuesday.
“Investors are in wait-and-see mode,” Noel Dixon, senior macro strategist at State Street Corp., told Bloomberg Television. “We don’t know what the retaliatory effects are going to be and how the Fed is ultimately going to react to those tariffs.”
In Asia, trading was thin because several regional markets including South Korea’s were shut for a public holiday. Japanese markets are closed through Jan. 6. Stocks fell in Australia and mainland China, with those in Hong Kong flat.
Chinese equities shrugged off data that pointed to an improvement in both services and manufacturing activity. Investors also showed little reaction to President Xi Jinping’s remark that China’s 2024 economic growth is expected to be around 5%, a target set by policymakers earlier in the year.
“Don’t think 2024 GDP growth still matters for markets actually as most have already moved towards faith that the government wants to meet the 5% target,” said Xin-Yao Ng, investment director at abrdn. “Perhaps it’s more to do with manufacturing PMI being below consensus, and within that some components like persistently soft input and output prices continue to suggest deflationary pressure.”
Meanwhile, in the latest sign of simmering tensions between Beijing and Washington, the US Treasury Department said it was hacked by a Chinese state-sponsored actor through a third-party software service provider.
As for commodities, gold ticked higher, set for one of its biggest annual gains this century after advancing 27%. Oil climbed after factory activity expanded for a third month in China, the latest evidence of economic recovery in the world’s top crude importer.
European natural gas prices rose in anticipation of a halt in Russian flows via Ukraine on New Year’s Day, as a transit agreement between the two nations expires. Gas for February rose as much as 2.2% on Tuesday.
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Key events this week:
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New Year’s Day holiday, Wednesday
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US construction spending, jobless claims, manufacturing PMI, Thursday
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US ISM manufacturing, light vehicle sales, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.3% as of 8:30 a.m. New York time
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Nasdaq 100 futures rose 0.3%
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Futures on the Dow Jones Industrial Average rose 0.2%
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The Stoxx Europe 600 rose 0.4%
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The MSCI World Index was little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.1% to $1.0394
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The British pound fell 0.1% to $1.2534
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The Japanese yen was little changed at 156.88 per dollar
Cryptocurrencies
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Bitcoin rose 4% to $95,640.92
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Ether rose 3.3% to $3,422.88
Bonds
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The yield on 10-year Treasuries declined one basis point to 4.52%
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Germany’s 10-year yield declined three basis points to 2.37%
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Britain’s 10-year yield declined four basis points to 4.57%
Commodities
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West Texas Intermediate crude was little changed
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Spot gold rose 0.3% to $2,614.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Michael G. Wilson, Zhu Lin and Catherine Bosley.
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