U.S. stock futures edged lower early Friday, as investors sought to close out a holiday-shortened trading week on a high note. Futures tied to the Dow Jones Industrial Average dropped 50 points, or 0.1%, while S&P 500 futures and Nasdaq 100 futures saw declines of 0.16% and 0.23%, respectively.
These movements come on the heels of a lackluster trading session on Thursday, which saw thin volumes in the market. The Dow, which gained modestly, marked its fifth consecutive day of gains. Meanwhile, the S&P 500 and Nasdaq Composite finished the day slightly below the flatline, reflecting muted investor activity.
Despite Thursday’s tepid performance, all three major U.S. indexes have posted gains this week, driven by strong back-to-back rallies at the start of the holiday period. As of Friday morning, the S&P 500 is up 1.8% for the week, with its best Christmas Eve performance since 1974, according to Bespoke Investment Group. The Dow has gained 1.1%, and the Nasdaq Composite has surged 2.3%, largely fueled by a rally in megacap technology stocks.
Although trading volumes have been light this week, many investors are hopeful for a strong finish to the year, spurred by the seasonal “Santa Claus rally.” This phenomenon refers to the market’s historical tendency to rise during the final five trading days of the year and the first two of January.
Todd Ahlsten, Chief Investment Officer at Parnassus Investments, noted, “The nation is experiencing a collective sigh of relief after navigating through a contentious election cycle and unusual market dynamics. Ending 2024 with strong year-to-date gains is a positive sign. Looking ahead to 2025, we expect the markets to broaden and improve.”
In December, the Nasdaq is on track to rise by 4.2%, buoyed by gains in Tesla, Alphabet, and Apple, which has seen its market capitalization approach $4 trillion. The S&P 500 is showing a modest gain of nearly 0.1% for the month. However, the Dow is set to close December with its worst monthly performance since April, down approximately 3.5%.
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