Dec 31 (Reuters) – U.S. stock index futures moved lower on the last trading day of 2025, but were set to wrap up a roller-coaster year characterized by uncertainty over President Donald Trump’s tariffs and unrivalled euphoria around AI with robust gains.
The S&P 500 and the Dow are set to close their eighth consecutive month in the green, bolstered by an insatiable appetite for AI stocks that pushed all three indexes to record highs this year.
But their yearly performances were still on track to be lower than the rally in the last two years as Trump’s “Liberation Day” tariffs sparked a meltdown in global markets in April, also casting a cloud over the future of monetary policy in the world’s biggest economy.
Investors diversified from U.S. stocks earlier in the year, but the frenzy to capitalize on the AI euphoria helped the S&P 500 overtake the European STOXX 600 for the year.
Communication services stocks on the S&P 500 are set to outperform this year, on the back of an over 65% jump in Alphabet, which is set for its best yearly performance since 2009.
The company is close to hitting $4 trillion in market capitalization and has seen numerous catalysts this year in the form of AI deals, Berkshire Hathaway’s $4.9 billion stake and an antitrust ruling win against breaking up the Google parent.
Analysts expect growth to broaden across sectors in 2026, partially attributing it to Trump’s “One Big Beautiful Bill” passed by the U.S. government, that could accelerate corporate earnings.
At 05:31 a.m. ET, Dow E-minis were down 68 points, or 0.14%, S&P 500 E-minis were down 17.25 points, or 0.25% and Nasdaq 100 E-minis were down 89.25 points, or 0.35%.
Wall Street’s main indexes closed lower on Tuesday, marking their third consecutive session in the red, at a time when investors eye the “Santa Claus rally”, a seasonal phenomenon where the S&P 500 typically posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.
The Federal Reserve’s interest rate trajectory will set the tone for global markets heading into 2026, after mild economic data this month and expectations of a new dovish Fed chair prompted investors to price in further reductions, despite policymakers urging caution.
Among stocks, Nike gained 1.9% in premarket trading after Elliott Hill bought stock for about $1 million.
Vanda Pharmaceuticals jumped 18.7% after the U.S. Food and Drug Administration approved its drug for the prevention of motion-induced vomiting .
Trading is expected to be thin in the holiday-shortened week, as markets will be closed on Thursday.
(Reporting by Purvi Agarwal in Bengaluru; Editing by Krishna Chandra Eluri)
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