U.S. equity futures showed a slight decline in early Monday trading as investors reduced their exposure to risk with only two trading days left in the year. The cautious mood was driven by ongoing concerns over high Treasury bond yields and the potential impact of future interest rate hikes.
On Friday, stocks finished lower, led by major tech stocks, which caused the S&P 500 to end the month in the red. Investors took profits from the tech sector, which had delivered strong gains throughout the year.
High Treasury Yields and Interest Rate Uncertainty
Treasury bond yields remained elevated, with the 10-year yield staying above 4.6%. The uncertainty about the Federal Reserve’s next moves on interest rates continued to weigh on the market. The 2-year yield also remained high at 4.304%.
Meanwhile, concerns over changes in policies, including those related to trade, taxation, and immigration under President-elect Donald Trump, are contributing to the market’s cautious stance. The U.S. dollar index dropped slightly by 0.11% to 107.877.
Stock: Global Markets Close the Year on Mixed Notes
Across the globe, European stocks faced mild losses, with the Stoxx 600 down 0.2% and the FTSE 100 falling 0.21%. In Asia, Japan’s Nikkei 225 slipped 0.96% on its final trading day, but it still managed to close the year up by 20%. The MSCI ex-Japan index showed a slight decline of 0.29% as traders moved with caution.
Boeing‘s stock took a hit, dropping 4.5% after a deadly crash involving a Jeju Air Boeing 737-800 in Seoul. The crash, which killed all 175 passengers and nearly all of the crew, is considered South Korea‘s deadliest aviation disaster. Authorities are investigating the cause, and the incident is expected to keep Boeing in the spotlight in the coming days.
Quiet Trading Expected as Markets Close for New Year’s Day
With trading volumes expected to remain low as the year comes to a close, the markets will observe a break for New Year’s Day on Wednesday. Futures for the S&P 500, up 25.2% for the year, point to a small decline of around 9 points at the opening bell.
The Dow Jones Industrial Average futures suggest a 44-point drop, while the Nasdaq, which has gained 31.4% in 2024, is set to open 20 points lower.
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