Stock futures fell in morning trading Thursday as the market is set to give back some of the gains during the holiday week. Futures on the Dow Jones Industrial Average fell 150 points. S&P 500 futures dipped 0.3% and Nasdaq 100 futures declined 0.3%. The market was closed on Wednesday for Christmas Day. The major averages could see their first down day this week after back-to-back gains. So far, the S&P 500 is up 1.8% this week, while the Dow has gained about 1%. The strong rally in megacap tech lifted the Nasdaq up 2.3% week to date. Investors were enthusiastic about the so-called Santa Claus rally, which occurs in the last five trading days of the year and the first two in January. Since 1950, the S&P 500 has generated an average return of 1.3% during this period, widely outpacing the market’s average seven-day return of 0.3%, according to LPL Research. Thursday marks the second day of the Santa rally. “The Santa Claus Rally may be alive and well. We’ll see, or it could be tough sledding,” Michael Zinn, UBS Wealth Management’s senior portfolio manager, said on CNBC’s “Squawk Box.” “It’s a sleepy time of year. The institutions aren’t really trading. It’s a little bit more retail driven. So what happens at the end of the year is not necessarily an indicator for how January and February.” Initial jobless claims data Thursday morning could provide an update on the health of the labor market. Month to date, the S&P 500 is up by 0.1%, while the tech-heavy Nasdaq has rallied 4.2%, thanks to the strong gains in Tesla, Apple and Alphabet. The blue-chip Dow, however, is down about 3.6% in the meantime, on track for its worst month since April. Treasury yields rose Thursday morning as investors digested new data on weekly jobless claims. The yield on the 10-year Treasury jumped 5 basis points 4.633%. The 2-year Treasury traded 2 basis points higher at 4.359%. Asia-Pacific stocks were mostly up Thursday, with several markets remaining closed for Boxing Day. Japan’s Nikkei 225 rose 1.12% to close at 8,220.9 while the Topix added 1.20% to close at 2,766.78, a day after a report said the country was preparing a record $735 billion budget for its fiscal year starting in April. The budget will account for increased social security and debt-servicing expenses, a draft reviewed by Reuters revealed. Shares of Japanese automakers Nissan and Honda rose 6.58% and 3.84% respectively. Both companies had begun official negotiations to merge at the start of the week, which could create the world’s third-largest carmaker by sales. South Korea’s Kospi slid 0.44% to close at 2,429.67 while the Kosdaq lost 0.66% to close at 675.64. China’s CSI 300 rose slightly higher to close at 3,987.48 as the World Bank upgraded the country’s gross domestic product growth forecast for 2024 and 2025, reflecting recent policy adjustments. Australia, New Zealand and Hong Kong markets were closed for the Boxing Day holiday. Oil edged higher on Thursday in thin holiday trade driven by hopes for additional fiscal stimulus in China, the world’s biggest oil importer, and supported by an industry report showing a decline in U.S. crude inventories. Brent crude futures rose 25 cents, or 0.3%, to $73.83 a barrel. U.S. West Texas Intermediate crude was at $70.49, up 0.6%, or 39 cents, from Tuesday’s pre-Christmas settlement. Gold prices rose on Thursday in holiday-thinned trade, while markets await clues on the Federal Reserve’s 2025 rate plan and tariff policies from the incoming Trump administration. Spot gold rose 0.5% to $2,627.62 per ounce. U.S. gold futures added 0.3% to $2,642.30. Markets in the euro zone are closed on Thursday for the Boxing Day public holiday.
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