January 2, 2025 – Investing.com – US stock index futures were pointing upward on Friday, signaling a potential rebound after a rough start to the new year. The initial trading session of 2025 saw a dip in major indices, primarily influenced by a decline in Tesla (NASDAQ: TSLA) shares. Investors are now turning their attention to upcoming economic data, including factory activity numbers, which may offer insight into the manufacturing sector’s health as the new administration under President Donald Trump approaches. Meanwhile, reports indicate that current President Joe Biden is expected to block the sale of U.S. Steel to Japan’s Nippon Steel.
1. US Futures Edge Higher
US stock futures saw a modest increase on Friday after a weaker start to the year on Thursday.
As of 03:19 ET (08:19 GMT), Dow futures rose 85 points, or 0.2%, S&P 500 futures gained 19 points, or 0.3%, and Nasdaq 100 futures were up 97 points, or 0.5%.
Thursday’s market performance saw a decline across Wall Street, with the Dow Jones Industrial Average dropping 152 points, or 0.4%, the S&P 500 slipping 13 points, or 0.2%, and the Nasdaq Composite losing 30 points, or 0.2%.
The biggest weight on sentiment was Tesla, whose shares fell more than 6% after the company posted its first annual decline in sales despite efforts to boost demand with price cuts and promotions.
Meanwhile, US Labor Department data showed a decline in both initial and continuing unemployment claims last week, which fueled expectations that the Federal Reserve may keep interest rates steady at its upcoming meeting.
2. ISM Manufacturing PMI on the Horizon
In a relatively quiet day for economic data, attention will be on the release of the US Institute for Supply Management (ISM) purchasing managers’ index (PMI) for December.
The ISM manufacturing PMI is expected to show a slight decline to 48.2, down from 48.4 in November. A reading below 50 indicates contraction in the sector, which comprises over 10% of the US economy. This marks the eighth consecutive month the index has been under 50, though the figure remains above the 42.5 level that suggests broader economic expansion.
Investors will be closely watching for any signs of growth in new orders and easing cost pressures within the sector. Notably, the new orders sub-index rose to 50.5 in November, signaling expansion for the first time since March, while input costs appeared to ease.
3. Biden Set to Block U.S. Steel Sale to Nippon Steel
Reports from The Washington Post indicate that President Joe Biden is poised to block the sale of U.S. Steel to Japan’s Nippon Steel. The deal, which had been under scrutiny for much of 2024, is a point of contention due to national security concerns. Lawmakers and unions, including the United Steelworkers Union, have voiced concerns that the sale could negatively impact US steel production and result in job losses.
The decision follows a review by the Committee on Foreign Investment in the United States (CFIUS), which referred the case to the White House for final approval. Biden’s opposition to the deal could lead to significant political and economic ramifications.
4. Bitcoin Sees Modest Recovery
Bitcoin prices rose on Friday, continuing a recovery from the price declines seen over the New Year holiday. The rebound comes as traders await greater clarity on the US regulatory landscape under the incoming Trump administration.
The focus this week has been on Tether, the leading stablecoin, which experienced a sharp drop in market capitalization. This followed the full implementation of the European Union’s Markets in Crypto-Assets law in late December. Several major European exchanges, as well as Coinbase (NASDAQ: COIN), pulled Tether from their platforms due to compliance concerns.
Despite the challenges faced by the crypto market in the final week of 2024, the possibility of more favorable regulations under Trump has helped maintain a generally optimistic outlook, with Bitcoin gaining ground from its lows.
5. Oil Prices Rise, On Track for Weekly Gain
Oil prices steadied on Friday, following a strong rally on Thursday. Investors are hoping that policy support in China, the world’s largest crude importer, will help boost global oil demand.
By 03:20 ET, US crude futures (WTI) climbed 0.1% to $73.20 per barrel, while Brent crude rose 0.1% to $75.99 per barrel. Both contracts closed at their highest levels in over two months on Thursday and are now on track to register their second consecutive weekly increase.
Market sentiment has been buoyed by China’s commitment to more proactive economic policies under President Xi Jinping, and expectations that the Chinese central bank could reduce interest rates later in the year to support growth.
