U.S. stock index futures traded quietly in a thin post-Christmas session on Friday, as investors largely stayed on the sidelines while maintaining a broadly optimistic outlook for the year ahead, driven by expectations of interest rate cuts and continued strength in corporate earnings.
The subdued tone followed a strong pre-holiday performance. Both the benchmark S&P 500 and the Dow Jones Industrial Average ended Wednesday’s holiday-shortened session at record highs, capping a rally that has gathered momentum toward the end of the year after months of uneven trading marked by sharp rotations and valuation-driven pullbacks.
By 6:13 a.m. ET on Friday, S&P 500 E-minis were down 2 points, or 0.03 percent. Nasdaq 100 E-minis edged up 6 points, or 0.02 percent, while Dow E-minis fell 55 points, or 0.11 percent. Trading volumes were expected to remain muted, with many institutional investors still away from the market following the Christmas break.
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Recent gains have come after a volatile stretch earlier in the year, when stocks, particularly those tied to artificial intelligence, came under pressure amid concerns that soaring valuations and heavy capital spending could squeeze profit margins. Those worries triggered intermittent selloffs and raised questions about whether the AI-driven rally had run too far, too fast.
Sentiment has since improved. Economic data pointing to continued resilience in the U.S. economy, coupled with growing market expectations of a more accommodative monetary stance next year under a new Federal Reserve chair, have helped steady investor nerves. That shift, alongside renewed interest in AI-linked stocks, has lifted all three major indexes—the S&P 500, the Dow, and the Nasdaq Composite—putting them on track for a third straight year of gains.
The S&P 500 has risen more than 17 percent so far in 2025. While megacap technology stocks powered much of that advance earlier in the year, recent sessions have seen the rally broaden, with investors rotating into more economically sensitive sectors such as financials and materials. Market participants often view such broadening as a sign that confidence is spreading beyond a narrow group of high-growth names.
Traders are also watching closely to see whether the market delivers a so-called “Santa Claus rally,” a seasonal pattern in which the S&P 500 tends to gain during the final five trading days of the year and the first two sessions of January, according to the Stock Trader’s Almanac. That period began on Wednesday and will run through January 5, offering a brief window to test whether seasonal optimism carries through to the start of the new year.
In premarket trading, Nvidia shares rose 0.7 percent after the AI chip designer said it would license chip technology from startup Groq and hire its chief executive officer, underscoring the intense competition for both technology and talent in the AI sector. Micron Technology added 2 percent, extending its strong run this month. The stock is up nearly 22 percent in December, buoyed by upbeat earnings forecasts and expectations of robust demand for memory chips used in AI and data centre applications.
Elsewhere, Biohaven shares fell 13.4 percent after the company said its experimental depression drug failed to meet the main goal of a mid-stage trial, deepening a difficult year marked by multiple clinical and commercial setbacks. Coupang, by contrast, jumped 6.2 percent after the online retailer said all customer information leaked from its South Korean operations had been deleted by the suspect, easing investor concerns over potential regulatory or reputational damage.
Precious metal miners also advanced, tracking fresh record highs in gold and silver prices. U.S.-listed shares of companies such as First Majestic, Coeur Mining, and Endeavour Silver rose between 2.8 percent and 4.4 percent, as falling interest rate expectations continued to support demand for bullion and related equities.
With the year drawing to a close, markets appear caught between caution and optimism. Thin holiday trading has kept price moves contained, but the broader narrative remains intact: investors are increasingly betting that easing monetary policy, steady economic growth, and solid earnings will extend Wall Street’s rally into 2026, even as questions around valuations and sector leadership linger beneath the surface.