Dow Jones Industrial Average (DJIA) futures are down triple digits this morning following a Santa Claus rally that occurred before Christmas Eve. S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are also pointed lower as the 10-year Treasury yield rose, hitting its highest level since May. Unemployment claims fell to a lower-than-expected 219,000 last week, providing traders with key economic data.
Market moves and stock highlights
The Cboe Options Exchange (CBOE) reported the exchange of more than 1.2 million call contracts and 614,931 put contracts on Tuesday. The single-session equity put/call ratio increased to 0.51, while the 21-day moving average remained at 0.61.
Toyota Motor Corp (NYSE:TM) shares surged 9.1% in premarket trading following reports that the automaker plans to double its return-on-equity objective. This comes after a 28.5% decline in the stock over the past nine months.
Piedmont Lithium Inc (NASDAQ:PLL) stock rose 2.2% ahead of the open, looking to extend gains, although the specific reason for this positive price action remains unclear. PLL has a year-to-date deficit of 68.8%.
RCI Hospitality Holdings Inc (NASDAQ:RICK) shares increased by 1.1% before the open, marking their third consecutive gain despite a 13.4% deficit for the year.
Dow Jones futures slip 0.2%: What’s next for the Santa Claus rally?
Asian market responses
Japan’s Nikkei index rose by 1.1%, while China’s Shanghai Composite saw a slight increase of 0.1%. The South Korean Kospi fell by 0.4%, and markets in Hong Kong remained closed. Japan is anticipating a budget of $735 billion for the fiscal year, which has contributed to a rise in the 10-year bond yield to 1.07%. In South Korea, impeachment voting will occur on Friday, driven by the Democratic Party’s initiatives.
US market activity
On Thursday, the Dow Jones Industrial Average dropped by 0.2%, the S&P 500 decreased by 0.3%, and the Nasdaq Composite fell by 0.5%. Earlier in the day, the 10-year Treasury yield rose to 4.64%, while oil prices increased with West Texas Intermediate futures trading around $70.60 per barrel.
Among exchange-traded funds, the Invesco QQQ Trust (QQQ) lost 0.5%, and the SPDR S&P 500 ETF (SPY) decreased by 0.3% after the market opened.
Nvidia and other stocks to watch
Nvidia (NVDA) stock rose by 0.4% on Tuesday, reaching a new buy point and extending a four-session winning streak. The stock is forming a double-bottom base that offers a 146.54 entry point by the end of the week. Shares were down 0.9% Thursday morning as they sought stability after recent gains.
Disney is nearing a 118.63 buy point in a cup with handle pattern, with shares up by 0.2% Thursday morning. BlackRock (BLK) is just below a 1,068.34 buy point and found support at its 50-day moving average, although shares fell 0.4% in early trading. Burlington Stores is in a buy range above a 279.51 buy point but slipped 0.3% Thursday morning.
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Interactive Brokers rallied by 1% Tuesday and is offering an early entry around 172.50, despite dropping 0.1% Thursday. Taiwan Semiconductor Manufacturing (TSMC) broke out on Monday, moving past a 205.63 buy point, but shares declined 0.6% Thursday.
The three major U.S. indices have experienced strong gains during this holiday week. Futures tied to the Dow fell by 120 points, while S&P 500 futures and Nasdaq 100 futures dipped by 0.3% each. The S&P 500 has risen 1.8% this week, marking the best Christmas Eve performance since 1974.
Jobless claims fell unexpectedly to 219,000 compared to the prior week’s 220,000, while continuing claims rose by 46,000 to 1.91 million, indicating the highest level since November 2021. Capital Economics projects the S&P 500 may end next year near 7000, representing a nearly 16% increase from its most recent close.
The dip in Dow Jones, S&P 500, and Nasdaq futures alongside rising 10-year Treasury yields reflects cautious sentiment, as higher yields pressure equities, particularly in growth sectors. Toyota’s 9.1% surge, driven by plans to double return-on-equity objectives, signals operational improvements and shareholder-focused strategies, while Nvidia’s pullback may indicate consolidation despite its bullish double-bottom base and AI leadership.
Mixed global market sentiment, with Japan’s fiscal optimism and South Korea’s political uncertainty, adds complexity to the outlook. Strong Christmas-week gains contrast with futures declines, suggesting profit-taking or year-end rebalancing. Lower jobless claims highlight economic resilience but fuel concerns over sustained Fed hawkishness, potentially sustaining market volatility. Investors might focus on high-quality stocks like Toyota and monitor macroeconomic trends, geopolitical events, and Nvidia’s CES 2025 keynote for long-term catalysts in an uncertain environment.
Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.
Featured image credit: Kerem Gülen/Ideogram
