Wall St set for flat open in post-Christmas session

By Sruthi Shankar and Shashwat Chauhan Dec 26 (Reuters) – Wall Street indexes were poised to open nearly flat in light post-Christmas trading on Friday, while investors bet that more interest rate cuts and strong corporate earnings would propel markets to fresh highs next year. The benchmark S&P 500 and the blue-chip Dow Jones Industrial Average closed at record highs on Wednesday, capping a broad rally in a holiday-shortened session. Stocks have climbed in recent days after months of intermittent selloff, as AI-related companies faced pressure amid concerns over soaring valuations and high capital expenditures denting profits. However, signs of resilience in the U.S. economy, the prospect of a dovish pivot under a new Federal Reserve chair next year and renewed appetite for AI stocks have fueled a market recovery, putting the S&P 500, Dow and Nasdaq on course for a third straight year of gains. "2026 is likely going to be a 'prove-it' year for markets. Companies must deliver tangible productivity and margin gains from AI and other investments," said Brian Jacobsen, chief economist at Annex Wealth Management. Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG. At 08:13 a.m. ET, Dow E-minis were down 66 points, or 0.13%, S&P 500 E-minis were down 3.5 points, or 0.05%, and Nasdaq 100 E-minis were up 9 points, or 0.03%. The S&P 500 has risen more than 17% so far in 2025, driven by megacap tech companies for much of the year, but the rally has broadened of late, with investors piling into cyclical sectors such as financials and materials. Traders are waiting to see if the "Santa Claus rally" — a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader's Almanac — can happen this time. That period began on Wednesday and will run through January 5. Nvidia shares edged up 0.7% in premarket trading, after the AI chip designer agreed to license chip technology from startup Groq and hire its CEO. Micron Technology rose 2.1%, adding to its near 22% surge so far this month, driven by strong earnings forecasts. Biohaven slumped almost 13% after its experimental depression drug did not meet the main goal of a mid-stage trial, adding to a string of setbacks for the company this year. Coupang rose 5.8% after the online retailer said all the customer information leaked from the South Korean company has been deleted by the suspect. U.S.-listed shares of precious metal miners such as First Majestic, Coeur Mining and Endeavour Silver rose between 2.5% and 3.1%, as silver and gold prices smashed fresh records again. [GOL/] (Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)

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