March S&P 500 E-Mini futures (ESH26) are down -0.24%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.44% this morning, pointing to a lower open on Wall Street as market participants trim risk at the start of the final week of 2025.
Technology megacaps weighed on stock index futures, with Tesla (TSLA) and Nvidia (NVDA) falling over -1% in pre-market trading.
This week, investors will focus on the minutes of the Federal Reserve’s latest policy meeting and a few U.S. economic data releases.
In Friday’s trading session, Wall Street’s major equity averages closed slightly lower. Most chip stocks retreated, with Arm Holdings (ARM) and NXP Semiconductors N.V. (NXPI) falling over -1%. Also, energy stocks lost ground after the price of WTI crude dropped more than -2%, with Devon Energy (DVN) and Marathon Petroleum (MPC) sliding over -1%. In addition, Warner Bros. Discovery (WBD) slid more than -1% after the New York Post reported that Paramount Skydance could abandon its $30-per-share cash offer and instead pursue legal action against the company’s board over its handling of the process. On the bullish side, Target (TGT) rose over +3% and was the top percentage gainer on the S&P 500 after the Financial Times reported that Toms Capital Investment Management had made a significant investment in the retailer.
“In the short-term, I believe in a [‘Santa Claus Rally’]. I could easily see a run at 7,000 just because we’re already so close. There’s a reason ‘don’t short a dull tape’ applies,” said Steve Sosnick at Interactive Brokers.
A Santa Claus rally refers to the consistent gains observed in the stock market over the final five trading days of December and the first two trading days of January. Since 1950, the S&P 500 has delivered an average return of 1.3%, posting gains 78% of the time, according to Adam Turnquist at LPL Financial.
The U.S. stock and bond markets will be closed on Thursday for the New Year’s Day holiday. Also, the U.S. bond market will close early at 2 p.m. Eastern Time on Wednesday for New Year’s Eve.
In this holiday-shortened week, the publication of the minutes from the Fed’s December 9-10 meeting will be the main highlight. The minutes will be scrutinized to assess policymakers’ appetite for additional rate cuts. The FOMC lowered its benchmark rate this month for the third time in a row, though officials’ median forecasts pointed to only one more cut in 2026. Some policymakers are worried about a soft labor market, while others are concerned about persistent inflation.
Meanwhile, U.S. rate futures have priced in an 82.8% chance of no rate change and a 17.2% chance of a 25 basis point rate cut at the conclusion of the Fed’s January meeting.
Market participants will also be monitoring several U.S. economic data releases this week, including the S&P/CS HPI Composite - 20 n.s.a., the Chicago PMI, Initial Jobless Claims, the S&P Global Manufacturing PMI, and Construction Spending.
Today, investors will focus on the National Association of Realtors’ pending home sales data, set to be released in a couple of hours. Economists forecast the November figure at +1.0% m/m, compared to the previous figure of +1.9% m/m.
The EIA’s weekly crude oil inventories report will also be released today. Economists expect this figure to be -2 million barrels, compared to the previous value of -1.3 million barrels.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.107%, down -0.58%.
The Euro Stoxx 50 Index is down -0.04% this morning, struggling for direction as trading resumed after the Christmas and Boxing Day holidays. Defense stocks led the declines on Monday after U.S. President Donald Trump spurred optimism for an end to the war in Ukraine following talks with Ukrainian President Volodymyr Zelenskyy over a potential peace deal. President Trump said he made “a lot of progress” in talks with President Zelenskyy on the deal, but noted it could take several weeks to finalize and that no firm timeline has been set. Industrial stocks also fell. Limiting losses, mining stocks jumped. Meanwhile, trading volumes are expected to remain light this week, with regional markets closed on Thursday for the New Year’s Day holiday. Investor focus in this holiday-shortened week will be on Spain’s preliminary December inflation data as well as the Eurozone’s final manufacturing PMI for December. In corporate news, ION Beam Applications (IBAB.BB) climbed over +4% after the radiopharmaceutical equipment maker said it secured a contract for its ProteusPlus proton therapy system in South Korea.
The European economic data slate is mainly empty on Monday.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.04%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.44%.
China’s Shanghai Composite Index closed slightly higher today, extending its winning streak to nine sessions, supported by new government pledges to stimulate domestic consumption. The benchmark index notched its longest winning streak since a 10-day advance in September 2024. Defense stocks led the gains on Monday after China launched military drills around Taiwan. Energy and bank stocks also advanced. Limiting gains, new energy stocks fell after the head of China’s passenger car association said demand for Chinese lithium batteries is likely to weaken in early 2026 amid an expected slump in domestic electric-vehicle sales and slowing battery exports. Meanwhile, China’s finance ministry said on Sunday that fiscal policy would be “more proactive” next year, reaffirming its emphasis on domestic consumption, technological innovation, and the social safety net. The pledge came after data released over the weekend showed that China’s industrial profits fell in November at the fastest pace in more than a year, weighed down by a slump in the mining sector. Industrial profits in November dropped 13.1% from a year earlier, a sharp deterioration from October’s 5.5% decline. Still, profits at major industrial enterprises rose 0.1% year-over-year in the January-November period. “The data shows slowing growth but remains resilient,” according to Yu Weining from the National Bureau of Statistics. Investor attention now shifts to China’s PMI data for December due later in the week.
Japan’s Nikkei 225 Stock Index closed lower today after two consecutive sessions of gains. Chip stocks slid on Monday, tracking Friday’s losses in their U.S. peers. The benchmark index also came under pressure as some large stocks with higher dividend payouts went ex-dividend. At the same time, bank stocks rose as investors digested the Bank of Japan’s summary of opinions from its latest policy meeting. The summary showed on Monday that policymakers discussed the need to continue raising interest rates even after a December hike, with one member calling for increases every few months. Some board members viewed Japan’s still-low interest rates as one of the factors weakening the yen and adding to inflationary pressures, suggesting that exchange-rate movements will play a significant role in discussions over future rate hikes. Meanwhile, one board member said it would be preferable to make decisions as appropriate at each policy meeting without committing to a specific pace. Japanese government bond yields rose and the yen strengthened following the release of the summary. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +8.73% to 23.67.
Pre-Market U.S. Stock Movers
The Magnificent Seven stocks fell in pre-market trading, with Tesla (TSLA) and Nvidia (NVDA) dropping over -1%.
Chip stocks are moving lower in pre-market trading. Micron Technology (MU), Marvell Technology (MRVL), and Advanced Micro Devices (AMD) are down more than -1%.
DigitalBridge Group (DBRG) jumped over +35% in pre-market trading after Bloomberg reported that SoftBank Group was in advanced talks to acquire the firm.
Energy stocks and energy service providers advanced in pre-market trading, with the price of WTI crude up more than +2%. APA Corp. (APA) is up over +1% and Devon Energy (DVN) is up nearly +1%.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - December 29th
Immersion Corp (IMMR), RCI Hospitality (RICK), Brookmount Explorations Inc (BMXI).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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