U.S. stock futures were sideways Monday evening after a momentous first trading day of 2022.
Contracts on the Dow Jones Industrial Average, S&P 500, and Nasdaq were mostly flat after all three indexes rallied in Monday’s session. The Dow jumped nearly 250 points to notch a record close, and the S&P 500 gained 0.6% to 4,796.56, topping its previous high. The Nasdaq drew strength from a great day for tech to end 1.2% up but fell short of its last record close in November.
“When I think about the market and the economy right now, I think about momentum,” Baird market strategist Michael Antonelli told Yahoo Finance Live.
“Momentum is one of the most durable factors when it comes to the stock market,” he said. “If you looked at new all-time highs last year, there were actually more new all-time highs than in the entire ’70s and 2000s combined, those two decades — we’ve got a lot going for us right now.”
The S&P 500’s performance on Monday showed the index was powered by its own velocity indeed, picking up right where it left off in 2021, ending a banner year with 70 closing records and its third annual double digit increase of 27%.
The Nasdaq also powered on to start 2022 trading, lifted mostly by landmark days for Apple (AAPL) and Tesla (TSLA), some of its most heavily-weighted stocks. Apple (AAPL) rallied 3% intraday to briefly cross a $3 trillion market capitalization, making it the first company to reach that milestone. Shares closed up 2.5% to $182.01 per share.
Meanwhile, Tesla (TSLA) began the new year with a 13% daily gain after its fourth quarter vehicle deliveries smashed estimates. Wedbush analyst and Tesla bull Dan Ives thinks it’s just the beginning for the electric vehicle maker, which he predicts will hit a $2 trillion market capitalization in about 18 months. The stock closed at $1,199.78 on Monday, up 13.53%.
The “January Effect” seems so far underway. Wall Street theorizes this perception of a seasonal rise in U.S. equities during the first month of the year is caused by an increase in purchasing following the drop in prices that occurs in December when investors sell positions that have declined in order to take the capital loss in that calendar year’s taxes. Some also think the anomaly is the result of traders using year-end cash bonuses to purchase equities the following month.
Strategists have made more than 5,000 calls for year-end S&P 500 targets. With profits expected to trend up, lofty equity valuations growing higher, and a strong pipeline for IPOs in the works, many think stocks will go up — some just believe that not as much.
Among them, Insigneo Financial Group CIO Ahmed Riesgo said an internal rotation is likely in 2022, with stocks that performed very well last year set to potentially underperform and drag the market down a bit while the vast majority of stocks will shoot up. Riesgo predicted mid- to single-digit returns for the [S&P 500] next year.”
Royce Investments co-CIO Francis Gannon shared similar sentiments with Yahoo Finance Live.
“You’re going to see more muted returns in the market this year,” he said. “But I do think that small caps have an edge here over their large-cap brethren just because of the fact that you’re going to see very strong earnings growth.”
6:02 p.m. ET: Stock futures quietly open after record-setting session
Here were the main moves in markets heading into the overnight session:
S&P 500 futures (ES=F): -0.50 points (-0.01%), to 4,785.50
Dow futures (YM=F): -29.00 points (-0.08%), to 36,426.00
Nasdaq futures (NQ=F): +16.25 points (+0.10%) to 16,501.75
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc