U.S. stocks looked set to trade in the green on Thursday, a welcome change after investors’ jitters about elevated interest rates and the deficit fueled a selloff over the final weeks of 2024.
Futures tracking the Dow Jones Industrial Average were up 179 points, or 0.4%, ahead of the first trading session of the year. Contracts tied to the S&P 500 climbed 0.6%. Nasdaq 100 futures rose 0.8%, a sign that tech was leading the rally.
All three indexes racked up triple-digit gains in 2024, but wobbled in December as the market fretted that the Federal Reserve won’t lower interest rates much more with inflation still running clear of its 2% target. Wall Street is also on edge about mounting U.S. debt after Treasury Secretary Janet Yellen warned last week that the government could hit its borrowing limit by mid-January.
“Obviously all minds are now thinking about what’s going to happen in 2025. But don’t expect to get many clues today,” Deutsche Bank’s global head of macro research Jim Reid said.
He added that the first trading session of the year has tended to be a “contrarian indicator” in recent times–the S&P 500 fell the first three days of 2024, but ended the year up 25%.
Oil rose after President Xi Jinping’s vow to revive China’s faltering economy eased traders’ worries about weak global demand for crude. The Brent international benchmark was up 0.4% to $74.93 a barrel early Thursday, and West Texas Intermediate U.S. climbed 0.4% to $72.02 a barrel.
Yields edged lower as U.S. bond markets reopened after the New Year’s Day holiday. The yield on the 10-year Treasury note slipped about 2 basis points to 4.552%, and 2-year yields were down by the same amount to 4.235%.