U.S. stock index futures were little changed in overnight trading Wednesday after the S&P 500 and Dow Jones Industrial Average closed at fresh records.
Futures contracts tied to the Dow Jones Industrial Average edged higher, while S&P 500 futures were flat. Nasdaq 100 futures fell slightly.
In regular trading on Wednesday, the S&P 500 rose 0.14% to a record 70th close for the year. This is the second-highest closing record for the benchmark index in a calendar year, behind only 1995’s 77 closing records.
The Dow rose 90 points, or 0.25%, to close at a record for the first time since November. The 30-stock benchmark had a sixth straight session of active trading. The Nasdaq Composite, however, fell 0.1%. Chip stocks were under pressure, with AMD, Xilinx and Nvidia all down at least 1%.
Travel-related stocks also fell amid Covid-19-related concerns, with the NYSE Arca Airline Index down 2.5%.
On the other hand, several consumer stocks rallied to new all-time highs during the session, including Domino’s Pizza, McDonald’s, Yum Brands, Costco and Procter & Gamble.
All three major averages are in green for December. The S&P and Dow are on track for their second positive month in three months, while the Nasdaq Composite is on track for a third straight month of gains.
Wednesday’s move higher for the Dow and S&P continued a strong historic period for stocks, which has been dubbed the “Santa Claus rally”. The S&P 500 has recorded gains over the period – the last five trading days of the year, followed by the first two sessions of January – 78.5% of the time since 1928, according to Bank of America.
“Santa has been good to investors this holiday season, and we expect another year of positive earnings,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. in 2022.
With just two trading days left in 2021, the key averages are also on track to end the year in the green. The S&P and Dow rose 27.6% and 19.2%, respectively. Nasdaq was up 22.3%, while the Russell 2000 was up 13.9%.
Anu Gaggar, global investment strategist at Commonwealth Financial Network, said: “The year 2021 is going to be a great year for the stock market. “Between the federal stimulus measures that keep the economy going, easy monetary policy from the Fed keeping markets liquid and interest rates low, and ongoing health improvement leading to amazing growth However, the market is already in the best possible shape,” she added.
Going forward, Gaggar said 2022’s performance depends on earnings and stock valuation.
Higher Treasury yields could prove to be a headwind for 2022, especially among the growth-oriented areas of the market. Yields on the US 10-year Treasury note surpassed 1.5% on Wednesday.
“We expect rates to rise modestly into 2022 based on short-term inflation expectations above historical trends and improving outlook,” said Lawrence Gillum, fixed-income strategist at LPL Financial. Expect growth as the impact of the COVID-19 variant subsides,” said Lawrence Gillum, fixed income strategist at LPL Financial. “Our end of 2022 forecast for 10-year Treasury yields is 1.75–2.00%.”
