Stocks

US Stocks Expected to Open Higher in 2025 Amid Historical Trends

Published January 2, 2025

U.S. stock futures are on the rise as the market opens on Thursday, marking the first trading session of 2025. This uptick follows a decline during the New Year’s Eve trading session, where all four major index futures showed positive movement in premarket trading.

The S&P 500 index experienced its longest year-end losing streak since 1966, falling for four consecutive sessions. Despite this setback, the index still managed to achieve a robust return of over 20% for the second consecutive year in 2024.

Market Performance and Indicators

In terms of bond yields, the 10-year Treasury notes yield 4.53%, while two-year Treasury notes yield 4.21%. According to data from CME Group's FedWatch tool, there is an 88.8% probability that interest rates will remain unchanged during the upcoming Federal Open Market Committee (FOMC) meeting on January 31.

Futures	Change (+/-)
Nasdaq 100	0.74%
S&P 500	0.56%
Dow Jones	0.45%
Russell 2000	0.55%

During premarket trading on Thursday, the SPDR S&P 500 ETF Trust (SPY) rose 0.66% to $589.97, and the Invesco QQQ Trust ETF (QQQ) increased by 0.83% to $515.48, according to reporting by Benzinga Pro.

Recap of Last Trading Session

Nvidia Corp. (NVDA) enjoyed an extraordinary year, with its stock soaring by 178.78% and hitting new all-time highs. The U.S. stock markets were closed on Wednesday in observance of New Year’s Day.

On the economic front, the S&P CoreLogic Case-Shiller home price index reported a 4.2% year-over-year increase in October, slightly down from a 4.6% growth in September, staying closely in line with market expectations. Additionally, the FHFA house price index showed a modest increase of 0.4% in October, just below the expected 0.5% rise. The Dallas Fed's general business activity index for Texas' service sector declined to 9.6 in December, down from 9.8 in November.

Mixed Sector Performance

The performance across sectors in the S&P 500 was varied, with the energy, materials, and real estate sectors leading the gains. In contrast, consumer discretionary and information technology stocks did not follow the positive trend and ended the session with losses.

Index	Performance (+/-)	Value
Nasdaq Composite	-0.90%	19,310.79
S&P 500	-0.43%	5,881.63
Dow Jones	-0.07%	42,544.22
Russell 2000	0.11%	2,230.16

Analyst Insights and Market Trends

Despite the downturn at the end of last year, analysts note that historical data suggests the S&P 500 typically rebounds after experiencing a year-end losing streak of three or more days. In 2024, the S&P marked 57 all-time highs and posted back-to-back year-to-date returns exceeding 20%. Over the last two years, the index increased by an impressive 53.2%, marking the largest two-year gain since 1997-1998.

The four-day losing period for the S&P 500 at the end of 2024 echoed the long-term trend of similar instances in the past. Notably, the first month following such declines has often yielded substantial gains. Ryan Detrick, Chief Market Strategist at Carson Research, highlighted that historically, when the S&P 500 closes lower for the last three days of the year, it sees an average return of 6.24% in the following month.

Market Growth Overview

The U.S. stock market has seen exceptional growth recently, peaking at a record $63.8 trillion in valuation. This figure represents a doubling of market capitalization over just 4.5 years, reflecting a remarkable upward trend. In 2024, the market added an astounding $10 trillion. Comparatively, the combined market value of China, Hong Kong, and Europe is approximately half that of the U.S., and the major tech companies of the “magnificent seven” collectively exceed the total market cap of the European market.

Some of the standout assets in 2024 included Bitcoin, U.S. stocks, and Gold, while Oil and U.S. bonds generally showed flat returns. A recent monthly report indicated that most asset classes exhibited strong performances, with Bitcoin returning 120% after a 153% gain in 2023.

Upcoming Economic Data

Several key economic data points will be released in the upcoming days, guiding investors on market direction:

Initial jobless claims for the week ending December 28 will be released on Thursday at 8:30 a.m. ET.

Construction spending data for November will be issued at 10:00 a.m. ET.

On Friday, the ISM manufacturing index for December will be announced at 10:00 a.m. ET.

Stocks to Watch

Tesla Inc. (TSLA) increased by 1.32% following comments from Elon Musk clarifying that a car explosion outside the Trump International Hotel in Las Vegas was not related to the Cybertruck.

SoFi Technologies Inc. (SOFI) fell by 2.40% after a downgrade to ‘underperform’ by Keefe, Bruyette, and Woods, citing concerns about its high valuation compared to long-term earnings potential.

Sealsq Corp. (LAES) jumped 18.7% in premarket trading, reporting expectations of a strong balance sheet with a cash position of over $85 million by January 3, 2025.

Faraday Future Intelligent Electric Inc. (FFIE) rose by 16.46% after announcing a delivery ceremony for the long-awaited ‘FF 91’ 2.0 Futurist Alliance EV, which is set to take place in January.

MicroCloud Hologram Inc. (HOLO) surged 19.70% following advancements in quantum technology, enabling new developments in qubit control.

Quantum-Si Inc. (QSI) advanced by 6.67% after a significant share sale by its director.

Commodities and Global Markets

In commodity markets, crude oil futures were up by 1.41% recently, trading around $72.73 per barrel. Gold futures also saw an increase, rising by 0.50% to $2,654.31 per ounce. Additionally, the Dollar Index showed a slight uptick of 0.12% to 108.612.

As for global equity markets, Asian indices largely declined, with Japan’s Nikkei 225, South Korea’s Kospi, China’s CSI 300, and Hong Kong’s Hang Seng index all down. However, Australia’s ASX 200 index saw a positive close. In Europe, market performances were mixed.

Overall, the beginning of 2025 looks promising, with potential for stock recovery based on historical trends following a year-end dip.

stocks, market, economy