Wall St poised to rise on AI boom, prices cut power bull run in 2024 Reuters

By Johan M Cherian and Pranav Kashyap

(Reuters) – Wall Street’s major indexes were poised to start the final 2024 trading session slightly higher, with signs of economic resilience after the pandemic two years ago, lower expectations of borrowing costs and growing AI continuing the bull run.

The , Dow and Nasdaq all hit record highs and are set for their second straight gains.

In the year A nearly 100 basis point cut in interest rates by the Federal Reserve and a rally in technology stocks in anticipation of corporate gains from artificial intelligence have sent stocks higher in 2024.

Technology, communications services and consumer discretionary stocks have gained more than 30% this year.

Although AI poster-child Nvidia (NASDAQ: )’s nearly 170% rise this year has been smaller than last year, the rally has helped the company reach $3 trillion in market value, while Tesla (NASDAQ: ) has reached the $1 trillion mark.

At 08:23 am ET, Dow E-minis were up 71 points or 0.17%, S&P 500 E-minis were up 13.75 points or 0.23% and E-minis were up 48.25 points or 0.23%.

Navia rose 0.7%, while the Elon Musk-led automaker added 1.2% in premarket trading. Movements are expected to be affected by thin volumes ahead of Wednesday’s New Year’s holiday.

Towards the end of the year, risk-taking improved as Donald Trump’s presidential victory raised bets that he would follow through on promises to ease regulations, cut taxes and raise tariffs to help domestic businesses.

His win also boosted small-cap stocks. It has set a record high and is set for the second year in a row with nearly 10% growth. Bank stocks are up more than 30 percent this year.

However, stocks faced a tough month in December, sending the S&P 500 to its biggest monthly decline since April, as yields on Treasury notes rose as equity ratings stretched and the Fed remained cautious.

The yield on the benchmark 10-year note fell to 4.5% as inflation concerns linked to Trump’s policies raised the prospect of the Fed reining in rate cuts in 2025.

“Until there is more clarity on what the incoming administration’s tax and tariff policies will look like, any further gains in equities are unlikely,” said Rafi Boyadjian, chief market analyst at brokerage XM.

“How earnings expectations improve in the coming months will be critical for Wall Street, especially for technology and AI stocks.”

Traders expect the first rate cut of 2025 in March or May. Meanwhile, Trump’s victory boosted crypto stocks by hitting $100,000.

Shares of MicroStrategy have more than tripled in value this year as it continues to buy and hold bitcoin. The stock rose 4.5% on Tuesday, while Coinbase (NASDAQ:) and MARA Holdings rose 2.6% and 2.5%.

VeriSign (NASDAQ: ) rose 2.1% after Berkshire Hathaway (NYSE: ) increased its stake in the Internet services company.

Elsewhere in the market, however, saw annual declines, with material inventories down more than 2%, hurt by economic problems in top metals consumer China.