The primary U.S. index futures suggest a nearly flat open on Tuesday, with stocks likely exhibiting a lack of direction following a mostly positive conclusion in the previous session. Many traders are expected to be absent from the market due to the impending Christmas Day holiday on Wednesday, resulting in a lighter-than-usual trading volume. Additionally, with the markets scheduled for an early closure this afternoon, some traders may remain on the sidelines.
The absence of major U.S. economic data may also contribute to subdued market activity, as the reports on durable goods orders and new home sales were rescheduled to Monday. This adjustment follows President Joe Biden's executive order to close the federal government for Christmas Eve.
Stocks showed little direction initially on Monday, but gained momentum throughout the trading day. The key indexes built on Friday's robust gains, recovering from the sell-off earlier in the week. The Nasdaq and S&P 500 moved firmly upwards as the session progressed, while the Dow saw a more modest increase.
Specifically, the Nasdaq rose by 192.29 points, or 1.0%, reaching 19,764.89. The S&P 500 gained 43.22 points, or 0.7%, closing at 5,974.07, while the S&P 500 increased by 66.69 points, or 0.2%, to 42,906.95. The significant rise in the tech-heavy Nasdaq was largely attributed to a rally in semiconductor stocks, evidenced by a 3.1% surge in the Philadelphia Semiconductor Index. Meanwhile, computer hardware stocks also showed notable strength, with the NYSE Arca Computer Hardware Index posting a 1.5% gain.
Beyond the tech sector, pharmaceutical stocks delivered a commendable performance, propelling the NYSE Arca Pharmaceutical Index up by 2.1%. Overall, trading activity was somewhat muted as traders appeared cautious in making major moves, anticipating a quiet week due to the mid-week holiday.
Uncertainty regarding the market's short-term prospects likely kept some traders hesitant, especially after the volatility experienced last week. On the economic front, the Commerce Department reported a sharper-than-expected decline in new orders for U.S. manufactured durable goods in November. Orders fell by 1.1% following a 0.8% increase in October, contrary to economists' forecast of a 0.4% reduction.
Excluding transportation equipment, durable goods orders slightly decreased by 0.1% in November after a 0.2% increase in October, although a 0.3% rise was anticipated. However, orders for non-defense capital goods excluding aircraft—a key business spending indicator—rose 0.7% in November after a 0.1% dip in October.
Separately, a Conference Board report showed an unexpected decline in consumer confidence in December. The consumer confidence index dropped to 104.7 from an upwardly revised 112.8 in November, contrary to economists’ projections of an increase to 113.0.
**Commodity, Currency Markets**
Crude oil futures are climbing by $0.53 to $69.77 per barrel, following a $0.22 decline to $69.24 per barrel on Monday. Gold futures are edging down $1.30 to $2,626.90 an ounce, after falling $16.90 to $2,628.20 in the previous session.
In currency markets, the U.S. dollar is valued at 157.15 yen compared to 157.17 yen at Monday's close in New York. Against the euro, the dollar trades at $1.0395, slightly down from $1.0405 yesterday.
**Asia**
Asian markets experienced gains on Tuesday, following a rally in major U.S. technology stocks in light holiday trading. Regional markets remained within a narrow range before closing higher, with Hong Kong and Sydney closing early for Christmas Eve.
Gold and oil maintained modest gains despite a stronger dollar and elevated bond yields in Asian trading. Chinese and Hong Kong markets surged after the Finance Ministry announced increased public spending aimed at boosting domestic demand next year. China's Shanghai Composite Index rose by 1.3% to 3,393.53, while Hong Kong's Hang Seng Index increased by 1.1% to 20,098.29.
Conversely, Japanese markets concluded lower as Finance Minister Katsunobu Kato reiterated concerns over volatile foreign exchange movements.The minutes from the recent Bank of Japan meeting indicated a consensus among policymakers in October to continue increasing interest rates should the economy develop as projected.
In Japan, the Nikkei 225 Index declined slightly by 0.3%, closing at 39,036.85, while the broader Topix Index recorded a slight gain at 2,727.26. Market giants SoftBank and Fast Retailing saw their shares decrease by 1.4% and 0.6%, respectively.
Conversely, Honda Motor experienced a surge of 12.2%, with Nissan Motor climbing 6%, and Mitsubishi witnessing a 7.2% increase. This came after the announcement of active discussions about a possible merger between the three automobile manufacturers.
Amidst ongoing political tension, Seoul's stock market showed little movement as investors reacted to new data revealing a sharp decline in South Korean consumer sentiment, marking its lowest point in over two years. The Kospi Index closed marginally lower at 2,440.52 following the announcement by the main opposition party to commence impeachment proceedings against Prime Minister and Acting President Han Duck-soo.
In Australia, the markets achieved modest growth while the Australian dollar faced pressure due to speculation about potential rate reductions by the Reserve Bank of Australia (RBA) in February. The RBA's minutes from their December 9-10 meeting noted increased confidence regarding inflation, suggesting easing policy restrictions could be appropriate if forthcoming data aligns with or falls below expectations. The S&P/ASX 200 Index gained 0.2%, reaching 8,220.90, driven primarily by the technology and energy sectors. The broader All Ordinaries Index rose by 0.2% to 8,471.50.
Across the Tasman Sea, New Zealand's S&P/NZX 50 Index increased by 0.7%, closing at 13,074.74.
In Europe, stocks showed slight gains in tentative trading ahead of the Christmas holiday. German markets remained closed, and U.K. and French markets shut early in observance of Christmas Eve. Markets in these countries, along with Spain, will remain closed on Wednesday and Thursday. The pan-European STOXX 600 Index improved by 0.2%, after a marginal increase of 0.1% on Monday. France's CAC 40 Index edged up by 0.1%, while the U.K.'s FTSE 100 rose 0.4%. Energy stocks mirrored the rise in oil prices, with BP Plc ticking upwards by 0.1% and Shell advancing by 0.8% in London.
Vistry Group's shares fell as the homebuilder issued its third profit warning this year, attributing it to delayed year-end transactions and completions. AstraZeneca showed a slight increase after the British pharmaceutical company and Japan's Daiichi Sankyo opted to withdraw their marketing authorization application in the European Union for the lung-cancer treatment Dato-DXd, following feedback from the European Medicines Agency.
In the U.S., the Treasury Department is scheduled to release the results of the five-year note auction, totaling $70 billion, at 11:30 am ET.
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