S&P 500 Futures Edge Higher Ahead of Holiday Week, Eyes on Second Straight Year of 20%+ Gains
The S&P 500 is on track to close 2024 with an impressive 25% annual gain, marking its second consecutive year of over 20% growth. Futures tied to the index were up modestly on Monday as traders kicked off a holiday-shortened week with renewed optimism.
Last Week’s Volatility and Inflation Relief
The index faced turbulence last week, dropping over 2% after the Federal Reserve signaled that interest rates may remain higher than anticipated in 2025. However, Friday brought some relief when the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, rose less than expected. The PCE increased 2.4% annually in November (vs. 2.5% forecast) and just 0.1% on a monthly basis, offering a glimmer of hope for investors concerned about cost pressures.
Outlook for the Week
With Christmas around the corner, trading is expected to remain quiet. U.S. markets will close early on Wednesday, capping what has been a stellar year for the S&P 500. If the index holds its gains, it would mark back-to-back years of over 20% growth (24% in 2023), raising the question: Can it achieve a third consecutive year of such strong performance in 2025?
Broader Market Sentiment
The prospect of a "Santa Claus rally" has buoyed investor sentiment, while political stability added to the positive tone. Over the weekend, President Biden signed a funding bill to prevent a government shutdown, maintaining federal agency funding for the next three months.
As Wall Street gears up to close the year on a high note, traders are left wondering if 2025 will bring a three-peat for the S&P 500 under the new administration.
The S&P 500 is on track to close 2024 with an impressive 25% annual gain, marking its second consecutive year of over 20% growth. Futures tied to the index were up modestly on Monday as traders kicked off a holiday-shortened week with renewed optimism.
Last Week’s Volatility and Inflation Relief
The index faced turbulence last week, dropping over 2% after the Federal Reserve signaled that interest rates may remain higher than anticipated in 2025. However, Friday brought some relief when the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, rose less than expected. The PCE increased 2.4% annually in November (vs. 2.5% forecast) and just 0.1% on a monthly basis, offering a glimmer of hope for investors concerned about cost pressures.
Outlook for the Week
With Christmas around the corner, trading is expected to remain quiet. U.S. markets will close early on Wednesday, capping what has been a stellar year for the S&P 500. If the index holds its gains, it would mark back-to-back years of over 20% growth (24% in 2023), raising the question: Can it achieve a third consecutive year of such strong performance in 2025?
Broader Market Sentiment
The prospect of a "Santa Claus rally" has buoyed investor sentiment, while political stability added to the positive tone. Over the weekend, President Biden signed a funding bill to prevent a government shutdown, maintaining federal agency funding for the next three months.
As Wall Street gears up to close the year on a high note, traders are left wondering if 2025 will bring a three-peat for the S&P 500 under the new administration.