US Stock Index Futures and Market Update

Investing.com reports that US stock index futures opened slightly higher on Tuesday in light trading in anticipation of the Christmas holiday, stabilizing after previous gains in major technology stocks.

At 10:00 ET (15:00 GMT), both S&P 500 Futures and Nasdaq 100 Futures rose by about 0.2%, while Dow Jones Futures declined slightly by 0.03%.

American Airlines Group (NASDAQ:AAL) shares fell roughly 1.4% after the airline temporarily grounded all U.S. flights due to a "technical issue," although the ground stop was subsequently lifted.

The New York Stock Exchange is scheduled to close early on Tuesday in observance of Christmas Eve, and will be closed on Christmas Day.

Wall Street began the week positively, driven by a surge in semiconductor stocks that bolstered tech stocks for the holiday-shortened week. On Tuesday, the S&P 500 increased by 0.4%, the Dow Jones Industrial Average dropped by 0.03%, and the NASDAQ Composite rose by 0.6%, with significant gains from tech giants such as Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), and Tesla (NASDAQ:TSLA).

Wall Street Recovers from Fed-Induced Slump

The major indices kicked off the holiday-shortened week on a positive trajectory, rebounding after last week’s Federal Reserve announcements signaled fewer-than-anticipated rate cuts in 2025 which had caused significant declines. The Fed adopted a cautious approach to monetary policy, emphasizing the importance of further progress on inflation before considering additional rate cuts.

Markets have adjusted cut expectations following the Fed's meeting, now anticipating just two cuts in the coming year. Investor sentiment improved after the PCE price index, the Fed's preferred inflation measure, showed a slower-than-expected increase in November. However, inflation remains above the 2% target.

Clients Continue to Buy US Equities – BofA

BofA Securities reported that its clients have continued to invest in US equities for the seventh consecutive week, with inflows reaching $10 billion, marking the second-largest increase since 2008 and the largest since January 2017. Most activity was centered on large-cap stocks, while small-cap inflows remained subdued.

Institutional and retail investors increased equity holdings for the third and second weeks respectively, while hedge funds were net sellers for the second week in a row. According to BofA strategist Jill Carey Hall, average inflows from institutional clients have reached a nine-month high as buyers typically re-emerge following October’s tax-loss selling.

Crude Gains Ahead of Xmas Break

Crude prices rose on Tuesday as trading remained tight ahead of the Christmas holiday. At 10:00 ET, US crude futures (WTI) increased by 1.2% to $70 per barrel, while Brent futures rose over 1% to $73.1 per barrel.

Despite the increase, both benchmarks are down as much as 5% in 2024, driven by ongoing concerns regarding reduced demand in China—the world's largest oil importer. OPEC and the IEA project slower demand growth in 2025, compounded by economic challenges anticipated under the new Trump administration.

Oil markets are also wary of potential oversupply in 2025, with US oil production nearing record highs and a probability of increased production from both US sources and OPEC. US inventory data from the American Petroleum Institute is expected to be released later on Tuesday.

*(Ayushman Ojha contributed to this article.)