(Bloomberg) – Tech stocks led gains as U.S. stock futures rose, showing Wall Street is recovering from a four-day slump that marks the end of 2024.
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The Nasdaq 100 (NQ=F) rose 0.8%, and the S&P 500 (ES=F) rose 0.6%. European energy stocks supported a modest rise in the region's STOXX 600 Index (^STOXX) on the back of a sharp rise in natural gas prices.
U.S. stocks are looking to erase a two-year losing streak that saw the S&P 500 (^GSPC) post its best two-year performance since the late 1990s. The so-called “Magnificent Seven” of tech megacap stocks have soared benchmark indexes by more than 50% since early 2023 amid enthusiasm for advances in artificial intelligence.
Charles Henry Montchaux, chief investment officer at Banque Sys & Co., said on Bloomberg TV that tech stocks “deserve these valuation premiums given their return on equity and free cash flow generation.” Ta. “The AI story will extend to other areas of the market, meaning that earnings growth will not only be supported by MagSeven, but also by other sectors of the S&P 500.”
The dollar (DX=F) fell against all G10 countries, with the biggest losses against Australia and the Kiwis. US Treasuries rose slightly.
European gas prices rose to their highest since October 2023 as the region braced for sub-zero winter temperatures in the absence of supplies from Russia, which are routed through Ukraine. The transit agreement between the two warring countries expires on New Year's Day, with no alternative arrangements in place.
Sentiment was subdued in Asia, with Chinese stocks leading the decline as economic data showed a slowdown and traders looked ahead to possible tariff hikes. MSCI's Asian stock index closed at its lowest level in nearly two weeks. Japan's financial markets remained closed.
Chapeng Xin, senior China strategist at ANZ Bank China, said “onshore market sentiment appears to be deteriorating” due to weak PMI data and recent dollar strength. “Investors are looking to exit against potential U.S. tariffs.”
Asia's risk-off trend reflects caution in the region as geopolitical tensions rise and traders begin implementing asset allocation strategies for 2025. China's growth prospects, the Federal Reserve's policy direction, and US President-elect Donald Trump's agenda are attracting investors' attention. .
In other commodities, oil rose after an industry report suggested U.S. crude inventories continued to shrink. Inventories fell by 1.4 million barrels last week, the sixth consecutive year of decline, according to a report from the American Petroleum Institute. gold rose.
