U.S. Stock Outlook | U.S. stocks will close 3 hours early for the Christmas holiday, with the market closed on December 25th, and the Nasdaq 100 will undergo rebalancing

1. As of December 24 (Tuesday) before the US stock market opens, the three major US stock index futures are mixed. As of the time of writing, Dow futures are down 0.05%, S&P 500 index futures are up 0.05%, and Nasdaq futures are up 0.14%.

1. As of the time of writing, the German DAX index is down 0.18%, the UK FTSE 100 index is up 0.51%, the French CAC 40 index is up 0.52%, and the Euro Stoxx 50 index is down 0.22%.

1. As of the time of writing, WTI crude oil is up 0.72%, priced at $69.74 per barrel. Brent crude oil is up 0.68%, priced at $72.81 per barrel.

Market News

December 25 (Wednesday) is the Christmas holiday in the United States, and the US stock market will be closed for one day. On December 24 (Tuesday), the US stock market will close 3 hours early, at 2:00 AM Beijing time on the 25th; the market will be closed all day on December 25. On Christmas Eve, trading of Brent crude oil futures contracts under the Intercontinental Exchange (ICE) will end early at 03:00 Beijing time on the 25th. Trading of precious metals, US crude oil, and foreign exchange futures contracts under the Chicago Mercantile Exchange (CME) will end early at 02:45 Beijing time on the 25th, and trading of stock index futures contracts will end early at 02:15 Beijing time on the 25th.

Nasdaq 100 welcomes rebalancing: Tesla, Meta, and Broadcom weights decrease, while Apple, NVIDIA, Microsoft, and Alphabet weights increase. In the annual rebalancing, the weights of Tesla (TSLA.US), Meta (META.US), and Broadcom (AVGO.US) in the Nasdaq 100 index have decreased, while the weights of Apple (AAPL.US), NVIDIA (NVDA.US), Microsoft (MSFT.US), and Alphabet (GOOGL.US) have increased. Specifically, data shows that the weight of Apple in the Nasdaq 100 index rose from 9.2% last Friday to 9.8%, NVIDIA rose from 7.9% to 8.4%, and Microsoft and Amazon also saw increases, while Alphabet's increase was relatively small. Meanwhile, Broadcom's weight decreased from 6.3% to 4.4%, Tesla's weight decreased from 4.9% to 3.9%, and Meta's weight decreased from 4.9% to 3.3%.

Next year's FOMC voting members will undergo a "blood change," with an increase in hawkish members, adding complexity to interest rate decisions. The Federal Reserve's rate-setting committee will welcome a new batch of voting members, including several hawkish officials. At the same time, the renewed concerns about inflation add a new layer of complexity to the Fed's decision-making Earlier this month, the Federal Reserve lowered the benchmark policy interest rate by 25 basis points and hinted that there would only be two rate cuts in 2025. Federal Reserve Chairman Jerome Powell clearly stated that the Fed is entering a new phase, where future rate cuts may occur at a more gradual pace and will depend on whether inflation subsides. The Federal Open Market Committee (FOMC), responsible for voting on interest rate changes, includes seven Federal Reserve governors and the president of the New York Fed, as well as rotating chairs from 11 regional Federal Reserve banks, of which only four regional Fed presidents have voting rights, rotating annually.

Wall Street "agrees" with the Fed: predicting a 50 basis point decline in 2Y U.S. Treasury yields next year. Wall Street is predicting that short-term U.S. Treasury yields will decline in 2025, despite the imminent threat posed by the trade and tax policies of incoming President Trump to the bond market. Strategists' forecasts are largely consistent, believing that the 2-year U.S. Treasury yield, which is more sensitive to Fed rate policy, will decline. They expect that 12 months from now, rates will be at least 50 basis points lower than current levels. The JPMorgan Asset Management team, led by David Kelly, stated in the company's annual outlook: "While investors may be shortsightedly focused on the speed and magnitude of rate cuts next year, they should take a step back and recognize that the Fed will still be in a rate-cutting mode in 2025." However, the Fed hinted at a smaller rate cut next year during this month's meeting, which could complicate the yield trend.

"Santa Claus Rally" arrives late, analysts: there are still opportunities after the holidays! The so-called "Santa Claus Rally" may come later this year than in previous years, but better late than never. A group of strategists from Ned Davis Research (NDR) pointed out that the performance of U.S. stocks has been relatively sluggish before the official start of the "Santa Claus Rally," which has made some investors uneasy. However, historical data shows that even if the rally does not start as expected, investors still have the opportunity to see a compensatory strong surge. According to the NDR team's analysis, when the stock market performs poorly in the days leading up to Christmas, it often achieves a significant rebound within the five trading days after the holiday. NDR analyst London Stockton mentioned in a report on Monday: "Although there are only two days left until Christmas and the S&P 500 index has fallen by 2%, historically, this situation has brought an average return of 2% in the five days after the holiday. In 17 similar cases, the market performance after the holiday was mostly strong."

Individual Stock News

The "new wealth code" in the chip industry: hybrid bonding! Apple (AAPL.US) and NVIDIA (NVDA.US) both rely on it. Renowned technology industry supply chain analyst Ming-Chi Kuo from TF International Securities stated on Monday that in the coming years, the Dutch semiconductor equipment giant BE Semiconductor may see some very strong performance and stock price catalysts, including benefiting from the incredibly strong semiconductor equipment demand driven by Apple's most significant iPhone 18 Pro, Apple's M-series AI chips, and NVIDIA's Quantum InfiniBand high-performance switches AI venture capital is booming! Elon Musk's xAI raises $6 billion, with big names like NVIDIA joining. According to regulatory documents, Elon Musk's artificial intelligence company xAI has raised $6 billion. This round of financing involved 97 investors, with a minimum investment amount of $77,593, but the documents did not disclose the specific identities of the investors. xAI recently announced that investors include Andreessen Horowitz, BlackRock, Fidelity, Morgan Stanley, Sequoia Capital, NVIDIA, and AMD.

Rumble (RUM.US) continues to soar after receiving $775 million investment from cryptocurrency company Tether. Video platform Rumble continued its upward trend, closing up over 80% on Monday, following the company's receipt of a $775 million investment from cryptocurrency company Tether. Rumble stated late last Friday that it would use $250 million of the financing proceeds to support growth plans, while the remaining funds would be used for a self-tender offer for up to 70 million Class A common shares, priced at the same price as Tether's investment, which is $7.50 per share. Tether will hold a minority stake in Rumble's issued common stock but will not have the right to designate any board members. As of 1 PM Eastern Time, over 58.22 million shares of Rumble changed hands, nearly 22 times its 3-month daily average. The short interest in the stock is 13.4%.

Tesla (TSLA.US) may see record deliveries in Q4; will it add fuel to the rally? As the fourth quarter comes to a close, Tesla (TSLA.US) is attempting to break its previous delivery records. A report from Barclays on Monday estimated that Tesla's total deliveries for the fourth quarter would be 515,000 units, representing a year-on-year increase compared to 1.8 million units in 2023, which would "maintain strong momentum in the stock market." Tesla's stock price rose 2.3% on Monday. However, analysts believe it remains to be seen whether this is enough to drive the company to achieve annual shipment growth, and investors still have limited focus on the stock's fundamentals, with Q4 deliveries potentially impacting the stock more severely than expected. The company stated that investor attention to Tesla's stock fundamentals is generally limited, and a slight decline in short-term trading volume "may not affect" Tesla's rally, which is driven by elected President Donald Trump, autonomous vehicles, and artificial intelligence.

TSMC (TSM.US) hits a record high! Up 84% this year, expected to achieve the best annual performance in 25 years. TSMC's stock listed in Taiwan has reached an all-time high, and the world's largest chip foundry is expected to achieve its best annual performance in 25 years. On Tuesday, following an overnight rise in U.S. chip stocks, including major client NVIDIA (NVDA.US), TSMC's stock in Taiwan rose 1.4%, surpassing the peak set on November 8. Due to investors' continued enthusiasm for artificial intelligence trades, TSMC's stock price has risen 84% this year. In addition to NVIDIA, TSMC's client list also includes Apple (AAPL.US) and AMD. The company has been a major beneficiary of the AI spending boom, with sales expected to grow by 36% in the December quarter and a gross margin of 58.3%, the highest level since 2022

Important Economic Data and Event Forecast

Beijing time 21:00: U.S. November building permits month-on-month revision (%) .

Beijing time 23:00: U.S. November seasonally adjusted new home sales annual total (10,000 units) .

Next day early morning Beijing time 05:30: U.S. API crude oil inventory change for the week ending December 20 (10,000 barrels)