March S&P 500 E-Mini futures (ESH25) are up +0.56%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.73% this morning as trading resumed after the New Year’s Day holiday, with investors awaiting a new batch of U.S. economic data.

Technology stocks led the gains in U.S. equity futures, signaling a rebound on Wall Street following a four-day losing streak that marked the end of 2024. Treasury yields fell on the first trading day of the new year, boosting investors’ risk appetite.

In Tuesday’s trading session, Wall Street’s major indexes closed in the red, with the benchmark S&P 500 and the tech-heavy Nasdaq 100 dropping to 1-week lows. Tesla (TSLA) slid over -3% and was the top percentage loser on the S&P 500 after announcing a recall of 77,713 vehicles in China due to software issues and possibly faulty driver airbags. Also, chip stocks retreated, with Nvidia (NVDA) falling more than -2% to lead losers in the Dow and Micron Technology (MU) dropping over -1%. In addition, Sangamo Therapeutics (SGMO) plummeted about -56% after Pfizer terminated its collaboration and license agreement with the company to develop a novel gene therapy for hemophilia A. On the bullish side, U.S. Steel (X) surged more than +9% after the Washington Post reported that Nippon Steel proposed giving the U.S. government a veto over output cuts as part of a final effort to secure approval for its planned merger.

Economic data released on Tuesday showed that the U.S. October S&P/CS HPI Composite - 20 n.s.a. eased to +4.2% y/y from +4.6% y/y in September, stronger than expectations of +4.1% y/y.

“There’s no Santa Claus rally this week, but investors received the gift of gains in 2024. [It] was a massive year for equity gains driven by a trifecta of the AI explosion, a slew of Fed interest rate cuts, and a robust U.S. economy,” said Greg Bassuk, chief executive officer at AXS Investments.

Market participants are entering the new year with several challenges, chief among them inflation and the Federal Reserve’s reaction to it, particularly after Chair Jerome Powell indicated there would be fewer interest rate cuts ahead. The markets are currently pricing in about 50 basis points of additional interest rate cuts from the Fed this year. Another question is how the pro-growth policies of President-elect Donald Trump will impact consumer prices and federal finances. The growth outlook in Europe and China will be on investors’ radar as well.

Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI, which is set to be released in a couple of hours. Economists, on average, forecast that the final December figure will be 48.3, compared to November’s figure of 49.7.

Investors will also focus on U.S. Initial Jobless Claims data. Economists expect this figure to be 222K, compared to last week’s number of 219K.

U.S. Construction Spending data will be reported today. Economists foresee this figure to come in at +0.3% m/m in November, compared to the previous number of +0.4% m/m.

U.S. Crude Oil Inventories data will be released today as well. Economists estimate this figure to be -2.400M, compared to last week’s value of -4.237M.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.534%, down -0.94%.

The Euro Stoxx 50 futures are down -0.02% this morning as trading resumed after the New Year’s Day holiday, with investors digesting factory activity data from the region. Automobile and bank stocks led the declines on Thursday, while energy and utilities stocks outperformed. A survey released on Thursday revealed that manufacturers in the Eurozone ended last year on a downbeat note, with factory activity contracting more sharply than initially expected. Meanwhile, the Euro Stoxx 50 Index climbed +8.3% and the broader Stoxx 600 Index advanced about +6% in 2024, with market participants now looking for fresh catalysts amid persistent worries over U.S. tariffs and European political instability. In corporate news, Vestas Wind Systems A/S (VWS.C.DX) gained over +2% after the Danish wind turbine manufacturer announced it had secured new orders in Italy.

Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, and Eurozone’s Manufacturing PMI data were released today.

The Spanish December Manufacturing PMI came in at 53.3, weaker than expectations of 53.6.

The Italian December Manufacturing PMI stood at 46.2, stronger than expectations of 44.9.

The French December Manufacturing PMI arrived at 41.9, in line with expectations.

The German December Manufacturing PMI came in at 42.5, in line with expectations.

Eurozone December Manufacturing PMI has been reported at 45.1, weaker than expectations of 45.2.

China’s Shanghai Composite Index (SHCOMP) closed down -2.66%, while Japanese financial markets were closed for a holiday.

China’s Shanghai Composite Index closed sharply lower today, kicking off the new year on a downbeat note as weaker-than-expected factory activity data weighed on sentiment. The benchmark index logged its weakest New Year start since 2016. Technology stocks led the declines on Thursday. A private-sector survey released on Thursday showed that China’s factory activity continued to expand in December, albeit at a slower-than-anticipated rate, as a drop in export orders dampened overall sales amid uncertainties surrounding the trade outlook. This data echoed an earlier official report, bolstering calls for additional stimulus to drive growth this year as Donald Trump is about to take office and is expected to escalate U.S.-China trade tensions. Meanwhile, Chinese President Xi Jinping stated at a New Year event on Tuesday that the nation’s economy is expected to have grown by about 5% for the full year of 2024. Xi indicated that economic support will continue into 2025, reaffirming a commitment to implement more proactive macroeconomic policies. Many market participants anticipate that the market will lack clear direction until the National People’s Congress in March when the government’s growth target and stimulus measures will be announced. In other news, China’s central bank initiated a second round of operations this week under a recently created funding scheme for financial institutions, aiming to support the country’s stock market. In corporate news, Sun Art tumbled over -20% in Hong Kong after Alibaba said it had agreed to sell its majority stake in the hypermarket chain to private equity firm DCP Capital.

The Chinese December Caixin Manufacturing PMI arrived at 50.5, weaker than expectations of 51.6.

Japan’s Nikkei 225 Stock Index was closed today for the New Year holidays. The markets will reopen on Monday, January 6th.

Pre-Market U.S. Stock Movers

Mega-cap technology stocks are moving higher in pre-market trading. Tesla (TSLA) and Meta Platforms (META) are up over +1%. Also, Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), and Alphabet (GOOGL) are up more than +0.5%.

Falling bond yields are boosting chip stocks in pre-market trading. Nvidia (NVDA), Micron Technology (MU), and Advanced Micro Devices (AMD) are up more than +1%.

Cloudflare (NET) climbed over +5% in pre-market trading after Goldman Sachs double-upgraded the stock to Buy from Sell with a price target of $140. 

Synaptics (SYNA) rose more than +3% in pre-market trading after announcing a collaboration with Google on Edge AI for the IoT. 

SoFi Technologies (SOFI) fell over -1% in pre-market trading after Keefe Bruyette downgraded the stock to Underperform from Market Perform with a price target of $8. 

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - January 2nd

Resources Connection (RGP) and Lifecore Biomedical (LFCR).