Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on December 15, 2022.
Spencer Plat | Getty Images
Stock futures fell during overnight trading on Thursday as investors braced for the last trading day of stocks’ worst year since 2008.
Futures linked to the Dow Jones Industrial Average fell 41 points, or 0.12%. S&P 500 and Nasdaq 100 futures traded 0.14% and 0.08% lower, respectively.
The overnight moves followed a rally during the regular trading session, with the Nasdaq Composite and S&P 500 up about 2.6% and about 1.8%, respectively. The Dow jumped 345 points, or 1.05%.
For the week, the Dow and S&P are slightly higher, while the Nasdaq is on course for a modest loss. All major averages are lower for December and about to break a two-month profit streak.
Friday marks the last trading day of what has been a painful year for stocks. A volatile bear market, continued inflation and aggressive rate hikes from the Federal Reserve have battered growth and technology stocks. These factors also weighed on investor sentiment.
All three major averages are marching into their worst year since 2008, which will deliver a three-year profit streak. The Dow outperformed the indices in 2022, dropping 8.58%, while the S&P and tech-heavy Nasdaq fell 19.24% and 33.03%, respectively.
Despite the annual losses, the Dow is on course for a quarterly gain of 15.65% and poised to break a three-quarter loss streak. It is also on track for its best quarter since the second quarter of 2020. The S&P is up 7.35% and is expected to break through three consecutive quarterly losses. The Nasdaq fell 0.92% for its fourth consecutive negative quarter, the first since 2001.
All major S&P sectors closed with gains on Thursday, led up by communications services. For the quarter, consumer discretionary and communications services are the only sectors heading for losses. Energy is the only sector on track for annual gains after rising nearly 58%.
As the calendar year progresses, some investors think the pain is far from over and expect the bear market to continue until a recession hits or the central bank flips. Some are also predicting that stocks will hit new lows. Thursday’s moves likely resulted from a combination of short covering, value investing and momentum traders joining the rally, said Adam Sarhan, CEO of 50 Park Investments.
“Basically nothing has changed,” he said. “We’ve just had a huge drop. The market has expanded downwards and it’s totally normal to see an uptick here.”
On the economic front, the Chicago PMI data for December will be released Friday.
– Gabriel Cortes contributed reporting