US OPEN: Indices open lower after holiday break as profit-taking emerges

• Wall Street indices are edging lower after the holiday break, with some profit-taking following Tuesday’s gains. The S&P 500 advanced 1.1% on Tuesday, while the Nasdaq Composite rose 1.4%.
• Tesla gained 7% on Tuesday, while Apple added 1.2%, with US semiconductor stocks also performing strongly. Broadcom rose 3%, while Intel advanced 1% amid investigations into Chinese companies in the sector.
• US500 is down 0.2% after the opening bell

Wall Street indices have largely recovered from the declines triggered by the Federal Reserve’s recent more hawkish-than-expected policy stance. The market now anticipates only two US rate cuts in 2025. However, a less hawkish Fed, driven by lower-than-expected PCE inflation data, is also contributing to market sentiment. The current gains align with the typical “Santa Claus Rally” effect. While this phenomenon is often associated with gains throughout December, the strongest performance is statistically observed in the final week of the month. Both the Nasdaq 100 (US100) and the S&P 500 (US500) tested record highs on Tuesday, and today’s trading likely reflects some short-term profit-taking.

The US500 is down approximately 0.2%, or 15 points, from the 6,100 level. However, since the last futures contract rollover, the US500 is up around 2%. For December as a whole, the gain is less than 0.5%, excluding the impact of contract rollovers.

Company news:

• Apple gained over 1% on Tuesday, pushing its market capitalization above $3.9 trillion. The company’s shares are trading near record highs. There has been significant discussion about Apple’s product development pipeline. The company has integrated artificial intelligence into its phones and is reportedly planning to enter the home security market, potentially challenging existing players such as Amazon and Google. Although iPhone sales growth has slowed, the adoption of AI is expected to boost sales in the coming quarters. Apple is trading marginally lower at the start of today’s session.
• Tesla rallied 7% during Tuesday’s abbreviated session following the announcement of a partnership with Hyundai, which will see the Korean carmaker’s customers gain access to Tesla’s charging network, significantly expanding its user base in the US. Tesla’s shares are trading close to recent record highs, gaining just under 1% at the start of the post-holiday session.
• Microstrategy is down approximately 2.5% at the beginning of the session, tracking a roughly 3% correction in Bitcoin. Bitcoin is down almost 4%, trading below $96,000.