Stock Futures Edge Lower as Wall Street Braces for Final Trading Week of 2024. Here’s What to Watch Next.

U.S. stock futures are poised for a slightly lower open on Monday, as investors prepare for the final trading week of 2024. At 6:30 p.m. Eastern Time on Sunday, Dow Jones Industrial Average futures had dipped 30 points, or 0.1%, S&P 500 futures had fallen 0.1%, and Nasdaq Composite futures had slipped 0.2%.

The S&P 500 finished the week with a 1.5% gain, while the Nasdaq Composite rose 2.2%, and the Dow Jones Industrial Average added 1.2%. The strong performance was driven by optimism surrounding the U.S. presidential election and expectations of corporate tax cuts and deregulation under the new administration. However, concerns over the Federal Reserve's announcement of fewer interest rate cuts in 2025 and geopolitical tensions have dampened hopes for the traditional "Santa Claus Rally."


As the final trading week of 2024 approaches, investors will be closely watching several key economic data releases and geopolitical developments that could impact market sentiment and stock performance. Here are some factors to keep an eye on:

1. Economic Data Releases: The upcoming week features several important economic data releases, including the Chicago PMI and pending home sales. These indicators can provide insights into the health of the U.S. economy and influence market sentiment. A strong reading on the Chicago PMI could reinforce the positive economic outlook and support the ongoing rally, while a weak reading might cause some concern. Similarly, a strong reading on pending home sales could indicate a robust housing market and support consumer confidence, while a weak reading might suggest a slowdown in the sector.
2. Geopolitical Events: Geopolitical events, such as the U.S. presidential transition and global trade dynamics, are expected to play a significant role in shaping market sentiment during the final trading week of 2024. The election of former President Donald J. Trump to the White House for a second term, along with full Republican control of Congress, has sparked guarded optimism among investors regarding potential lower taxes and less regulation. However, concerns persist about the path forward for tariffs, immigration, and fiscal spending priorities. Additionally, global trade dynamics, including supply chain disruptions and energy shortages, have impacted real estate and energy stocks negatively in 2024. Investors will closely monitor these geopolitical events and their potential impact on market sentiment and performance.
3. Sector Performance: The performance of key sectors, such as technology, financials, and consumer discretionary, will likely influence the overall market trend as the year comes to a close. The technology sector has been a significant driver of market gains in 2024, with companies like Tesla and Alphabet contributing significantly to the indices' performance. As the year comes to a close, the sector is expected to continue its strong performance, buoyed by investor optimism and expectations of corporate tax cuts and deregulation under the new administration. However, the sector's high valuations and potential regulatory risks could also lead to volatility. The financial sector has been mixed in 2024, with some banks and smaller companies facing challenges, while others have shown resilience. As the year comes to a close, the financial sector's performance will depend on factors such as interest rate changes, regulatory environment, and economic growth. A more favorable regulatory environment under the new administration could boost the sector's performance. The consumer discretionary sector has also seen varied performance in 2024, with some companies benefiting from sector-specific growth, while others have lagged behind. As the year comes to a close, the sector's performance will depend on consumer spending, which has remained strong despite rising unemployment. However, potential changes in fiscal policy and geopolitical tensions could impact consumer confidence and spending, affecting the sector's performance.