(Reuters) – U.S. stock index futures rose in the last trading session in 2024, extending a rally of more than two years ago on signs of post-pandemic economic resilience, hopes of lower borrowing costs and a boost in artificial intelligence.
The , Dow and Nasdaq indexes are near record highs and are on track to finish higher for the second year in a row.
A rate cut of nearly 100 basis points in 2024 by the Federal Reserve and a rally in tech stocks in anticipation of a boost in corporate profits from artificial intelligence fueled a strong rally in stocks in 2024.
The S&P 500 technology, communications services and consumer discretionary stocks have jumped more than 30% this year.
While AI poster Nvidia’s (NASDAQ: ) nearly 170% rise this year was smaller compared to last year, the surge helped the company reach a $3 trillion market cap, while Tesla (NASDAQ: ) regained the $1 trillion level dollars.
At 5:45 a.m. ET, the Dow E-minis were up 90 points, or 0.21%, the S&P 500 E-minis were up 17 points, or 0.29%, and the E-minis were up 75.25 points, or 0.36%.
Nvidia rose 0.7%, while the Elon Musk-led automaker added 1.6% in premarket trade. Moves are expected to be influenced by small volumes ahead of Wednesday’s New Year holiday.
“It’s also normal to start thinking that the AI boom will one day disappear…but anyway, all those who were looking for a correction have been wrong so far, and Wall Street analysts have spent the year raising their price targets,” said Ipek Ozkardeskaya, senior analyst, Swissquote Bank.
Towards the end of the year, risk-taking improved as Donald Trump’s presidential victory increased bets that he would follow through on his promises to ease regulations, cut taxes and raise tariffs to help domestic companies.
His win also sent small-cap stocks into a tailspin. It hit a record high, giving it a rise of around 10% – its second consecutive annual gain. have also benefited and are up more than 30% this year.
However, stocks languished in December, putting the S&P 500 on course for its biggest monthly decline since April, due to higher Treasury yields at a time when stock valuations are stretched and the Fed is cautious.
The yield on the benchmark 10-year note slipped from its seven-month high of 4.5%, as markets see Trump’s plans as inflationary, potentially slowing the pace of Fed rate cuts.
Traders expect the central bank to deliver its first rate cut in 2025 either in March or May, according to CME Group’s (NASDAQ: ) FedWatch tool.
Trump’s victory also proved to be a tailwind for crypto stocks as bitcoin prices hit $100,000.
Shares of MicroStrategy have more than tripled in value this year as it continues to buy and hold bitcoin. Shares rose 3.3% on Tuesday, while Coinbase (NASDAQ: ) and MARA Holdings added 1% and 0.6%, respectively.
Other areas of the market, however, witnessed year-on-year declines, with material inventories falling more than 2%, hurt by economic woes in China, the metal’s biggest consumer.
