(Bloomberg) — US equity futures rose on the back of optimism over tech stocks, signaling that Wall Street is set to rebound from the four-day slump that marked the end of 2024.
Most Read from Bloomberg
Nasdaq 100 contracts climbed 0.8%, while those for the S&P 500 were up 0.6%. European energy stocks outperformed the regional Stoxx 600 index, buoyed by a sharp increase in natural gas prices. The dollar trimmed an earlier decline while Treasuries ticked higher.
US stocks are looking to snap a losing streak that took some shine off the S&P 500’s best two-year run dating back to the late 1990s. The index has surged more than 50% since the start of 2023, powered by the so-called Magnificent Seven tech megacaps amid enthusiasm around artificial intelligence.
Tech stocks “deserve these valuation premiums when you look at return on equity and free cash flow generation,” Charles-Henry Monchau, chief investment officer at Banque Syz & Co., said on Bloomberg Television. “The AI story is going to broaden to the rest of the market, which means that earnings growth will be supported by not just the Mag Seven but also other sectors in the S&P 500.”
Meanwhile, an attack on revelers celebrating New Year’s in New Orleans thrust US domestic security back into the spotlight less than a month before Donald Trump is sworn in as president. The Federal Bureau of Investigation is probing that incident as well as the deadly explosion of a Tesla Cybertruck outside of Trump’s hotel in Las Vegas.
Investors also have some early 2025 economic data to process Thursday, including US jobless claims. In the months to come, the growth outlook in Europe and China, the Federal Reserve’s policy path and Trump’s agenda will be among the most pressing items on traders’ radars.
European gas prices rose to the highest since October 2023 as the region braced for freezing winter temperatures without Russian supplies delivered via Ukraine. A transit contract between the two warring nations expired on New Year’s Day, with no alternative in place.
Sentiment was subdued in Asia, where Chinese equities led declines as economic data pointed to a slowing economy and traders looked ahead to potentially higher tariffs. MSCI’s gauge of Asian shares headed for its lowest close in almost two weeks. Financial markets in Japan remained closed.
“Onshore sentiment seems to be deteriorating” due to the poor PMI data and recent dollar gains, said Zhaopeng Xing, senior China strategist at ANZ Bank China. “Investors would like to pull back against possible US tariffs.”
Source: US Stocks Set for Bounce After Four-Day Losing Run: Markets Wrap
