U.S. Markets on Lookout For Late Santa Rally

As of the close on Monday, the three major U.S. stock indexes have been on the lookout for a Santa rally that doesn't seem to be coming. A further dip to start the week follows a sharp decrease observed last Friday.

Since Thursday's close, the Dow Jones Industrial Average has dropped by 1.74%, the Nasdaq Composite by 2.67%, and the S&P 500 by 2.16%. An element of profit-taking could certainly be playing a role, with some of the high growth names slowing into year end.

The Magnificent 7 have seen a more pronounced drop, with a dip in the MAGS ETF of 4.3% in the past 2 sessions leaving traders pained.

In the broader economic context, Bank of America has issued a warning regarding potential risks linked with “Trump 2.0” policies and the rapid advancements under the AI revolution, suggesting that these factors could pave the way for a market bubble in 2025.

Boeing's stock (NYSE: BA) was notably impacted by recent tragic events, prices seeing a steep decline with intraday losses over 5% attributed to intensified scrutiny from South Korea following a fatal crash involving a Boeing 737-800 at Muan Airport. The incident, which resulted in 179 fatalities, has prompted a special inspection of the aircraft model. The stock price regained some of the losses through the session, ending the day down 2.31%.

Another factor that could be easing bullish sentiment is the fact that the Federal Open Market Committee (FOMC) will see four new voting members next year. Three of these members are known for their hawkish stances, signalling potential policy shifts.

In this morning's pre-market, ETFs focused on the indices, the QQQ's, SPY, and the DIA are all up more than 0.25%, indicating a potentially brighter day ahead for bulls.