U.S. equity markets are showing signs of a late-year lift, with investors cautiously positioning for potential gains in 2026 as trading activity slows during the holiday period.
Futures linked to the S&P 500 were up around 0.3% in early trading, extending a strong rebound from the previous session, which marked the index’s best daily performance in several weeks. Nasdaq 100 futures climbed roughly 0.5%, reflecting renewed strength in technology stocks, while Dow Jones futures were largely unchanged.
Market attention is set to turn briefly to a small batch of economic data releases, including a delayed third-quarter GDP report due later in the day. However, analysts note that the figures largely reflect economic conditions prior to the recent government shutdown and are therefore unlikely to shift sentiment significantly.
Greater focus is expected on December consumer confidence data from the Conference Board, particularly after sentiment weakened in November to its lowest level since the market volatility seen earlier in the year. Beyond that, the economic calendar remains relatively light.
Technology shares regain momentum
Wall Street ended last week on a mixed note. The S&P 500 edged modestly higher, while the Nasdaq Composite gained more solid ground, supported by a recovery in major technology and semiconductor stocks. By contrast, the Dow Jones Industrial Average posted weekly losses.
With U.S. markets operating on a shortened schedule ahead of Christmas — including an early close midweek and a full closure on Thursday — trading volumes are expected to remain subdued, a dynamic that can amplify market moves.
Technology stocks drew renewed interest after Micron Technology issued an upbeat forecast, reviving optimism around artificial intelligence-driven demand. The outlook helped ease recent concerns surrounding elevated valuations, heavy capital spending requirements and uncertainty over the sustainability of AI-related growth.
Shares in Oracle also advanced after reports suggested TikTok had agreed to sell its U.S. operations to a new joint venture, with Oracle expected to provide cloud and data infrastructure services. The development added further momentum to gains across large-cap technology names.
Rate-cut expectations provide additional support
Broader market sentiment was underpinned by last week’s inflation data, which came in softer than expected. The reading reinforced investor expectations that the Federal Reserve could begin cutting interest rates sooner in 2026, helping to push Treasury yields lower and providing an additional boost to equities.
Markets are also closely monitoring developments surrounding the future leadership of the Federal Reserve. With Chair Jerome Powell’s term due to expire in May, comments from potential successors — as President Donald Trump interviews candidates — are being scrutinised for clues on the future direction of monetary policy.
As the year draws to a close, investors appear increasingly willing to look beyond near-term uncertainties, with optimism around artificial intelligence and easing inflation helping to support risk appetite despite the quieter holiday backdrop.
