U.S. stock futures declined on Monday after ending lower on Friday. All four index futures slipped in trade.

Although ‘Santa Rally' has not picked up pace despite rising over 1% on Christmas Eve, the S&P 500 index is on its way to registering a robust 20% plus return for the second consecutive year in 2024.

The 10-year and two-year Treasury notes yielded 4.59% and 4.30%, respectively. The probability of having no change in the interest rates for the upcoming Jan. 31, 2025, FOMC meeting was at 88.8%, according to CME Group’s FedWatch tool.

In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was down 0.23% to $593.66 and the Invesco QQQ Trust ETF (NASDAQ:QQQ) fell 0.20% to $521.43, according to Benzinga Pro data.

Cues From The Last Session

U.S. stock markets experienced a lower close on Friday as major indices retreated following gains on a weekly basis. The Dow Jones Industrial Average declined by over 300 points, while Tesla Inc. (NASDAQ:TSLA) and Nvidia Corp. (NASDAQ:NVDA) suffered losses.

The Dow Jones Industrial Average closed at 42,992.21, down approximately 0.77%, whereas, the S&P 500 and Nasdaq Composite also experienced declines, falling by 1.11% and 1.49%, respectively.

All sectors within the S&P 500 ended the day in negative territory. Consumer discretionary, communication services, and information technology sectors recorded the most significant losses.

On the economic front, U.S. wholesale inventories decreased by 0.2% in November. The U.S. trade deficit in goods widened to $102.86 billion.

Despite Friday’s losses, major indices still recorded positive returns for the week. The Dow Jones gained approximately 0.4%, ending a three-week losing streak. The S&P 500 added 0.7%, and the Nasdaq rose by about 0.8%.

Insights From Analysts

Chamath Palihapitiya, the billionaire investor, and former Facebook executive, explained in an X post that greater concentration in a few stocks increases the risks of investing.

He highlighted the inequality in the weight of the stocks within the S&P 500 index and said, "If there is any market volatility, the lack of diversification could cause massive impairment."

Kevin Gordon, the director and senior investment strategist at Charles Schwab shared a graphic showing the top ten stocks in the S&P 500 represent 40% of the index market capitalization.

As the ‘Magnificent Seven’ stock led the market lower on Friday, Louis Navellier of Navellier & Associates in his note said, "The Santa Claus rally is in serious doubt now." But he quipped that "It certainly appears to be a bit of profit-taking."

Reinstalling confidence among investors Navellier added that Friday's selloff should not be worrisome and the ‘B team' of traders were getting rid of their inventory before the weekend.

"Investors shouldn’t worry about the sell-off – it’s just what we call inventory cleaning. But there is a sell-off today, and if you did want to buy, it's not a bad time to nibble. Normally, we rally going into New Year’s, and we normally rally in the new year. So, if we don’t, it means we have to wait until the A team comes back, which will of course be after the New Year’s holiday," he added.

The 10-year Treasury yield hit 4.631% during Friday's session, which was its highest level since May 30, 2024. However, it is currently yielding 4.59% on Monday.

Talking about the spiking yields, Ed Yardeni, the president at Yardeni Research said in a note "The Bond Vigilantes are sending a loud warning message. They aren’t convinced Donald Trump, the new sheriff coming to town, will maintain fiscal law and order any better than the old sheriff. They are also losing their confidence in Jerome Powell, the deputy in charge of monetary law and order."

According to Navellier, "The bond vigilantes have been pushing the narrative that the Trump tariffs are going to be inflationary, but the reality is that a strong U.S. dollar causes the prices of commodities and imported goods to decline."

Yardeni, in his note, mentioned that a pullback in the markets may have already started. "We still think that the 10-year yield should trade around 4.50% plus/minus 25bps in 2025. But we can’t rule out a move back up to last year’s high of 5.00% early next year. That’s another reason why we expect a stock market pullback/correction that might have started already. The S&P 500 peaked at a record 6090.27 on Dec. 6," he said.

See Also: How To Trade Futures

Upcoming Economic Data

A few important data points will be released in this truncated week that will help investors determine the future course of action.

• On Monday, Chicago Business Barometer (PMI) data for December will announced at 9:45 a.m., ET.

• November's pending home sales data will be released at 10:00 a.m., ET.

• On Tuesday, November's S&P Case-Shiller home price index for 20 cities will be announced at 9:00 a.m., ET.

• No data is slated to be released on Wednesday, Jan. 1, owning to a New Year's holiday.

• On Thursday, initial jobless claims till Dec. 28 will be announced at 8:30 a.m., ET.

• Construction spending data for November will be released at 10:00 a.m., ET.

• On Friday, ISM manufacturing data for December will be announced at 10:00 a.m., ET.

Stocks In Focus:

• CEL-SCI Corporation (NYSE:CVM) was down 43.34% in premarket trade after it priced its $5 million public offering of 16.13 million common shares at 31 cents per share.

• CCSC Technology International (NASDAQ:CCTG) was up 31.71% after its earnings on Friday. Its revenue surged by 22.9% year-over-year to $9.2 million for the third quarter.

• Citius Pharmaceuticals Inc (NASDAQ:CTXR) was down 16.58% after reporting a net loss of $39.4 million, or $5.97 per share for the full year ended Sept. 30, versus a year-ago net loss of $32.5 million, or $5.57 per share.

• Genius Group (NYSE:GNS) was up 15.81% in premarket after posting first-half revenue of $4.9 million, down from $11.8 million in the year-ago period. Its net assets surged 177% to $54.6 million from $19.7 million as of Dec. 31, 2023.

• Intrusion Inc (NASDAQ:INTZ) was up 125.93% in premarket after Dow Newswire reported Streeterville Capital has acquired a 9.8% stake in the company.

• Amplitech Group Inc (NASDAQ:AMPG) was up 24.17% as it raised $5.8 million in gross proceeds for the company before fees and expenses were deducted. It was a direct offer of 1,871,000 shares of common stock at $3.10 per share to institutional investors.

Commodities, Gold And Global Equity Markets:

Crude oil futures were lower in the early New York session by 0.18% to hover around $70.47 per barrel.

The gold spot index was down by 0.25% to $2,625.56 per ounce. The Dollar Index was down 0.05% to 107.947 level.

Asian markets were mostly lower on Monday as Hong Kong’s Hang Seng, Japan’s Nikkei 225, Australia’s ASX 200, and South Korea’s Kospi declined. Whereas, China’s CSI 300 ended higher. European markets were mixed.

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