Stock Market Update

Equity futures point to a modestly lower opening as the stock market gears up for its final session of the year. 

The major averages finished slightly lower in yesterday's action that was once again devoid of any meaningful catalysts. Stocks drifted for much of the session, and the afternoon release of the December FOMC meeting minutes did not provide any surprises or change the market's expectations for policy easing in the near term.

While stocks have given back some of last week's gains, the major averages are still zeroing in on solid year-to-date gains. The Nasdaq Composite leads the way with a 21.3% gain heading into today's session, while the S&P 500 is up 17.3%, and the DJIA is up 13.7%. 

Newsflow is light again this morning ahead of tomorrow's New Year's Day holiday that will see the market close for the day. 

The market will receive the weekly initial jobless claims data (Briefing.com consensus 226k) at 8:30 a.m. ET.

In corporate news:

• Drugmakers are expected to increase prices on 350 medicines next year, according to Reuters.
• Banks anticipate more large M&A deals in 2026, according to The Wall Street Journal.
• NVIDIA (NVDA 188.23, +0.69, +0.4%) approached TSMC (TSM 302.49, +2.91, +1.0%) to increase production of H200 chips, according to Reuters.
• ByteDance is planning to spend $14 billion on NVIDIA (NVDA) chips in 2026, according to South China Morning Post. 
• Tesla's (TSLA 456.29, +1.86, +0.4%) supply deal with a South Korean company falls short of expectations, according to Bloomberg.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the year on a mixed note while markets in Japan and South Korea were closed. Japan's Nikkei: CLOSED (+26.2% in 2025), Hong Kong's Hang Seng: -0.9% (+27.8% in 2025), China's Shanghai Composite: +0.1% (+18.4% in 2025), India's Sensex: +0.6% (+9.1% in 2025), South Korea's Kospi: CLOSED (+75.6% in 2025), Australia's ASX All Ordinaries: UNCH (+7.1% in 2025).

In news:

• China's PMI readings for December returned into expansionary territory by a slight margin, beating expectations.
• The Chinese government plans to continue issuing trade-in subsidies for auto purchases in 2026 and will expand the program to include digital and smart products.
• Bytedance plans to increase its purchases of chips from NVIDIA by 17% yr/yr.
• China Securities Journal reported that domestic banks will slash business loan rates below 3.0%.

In economic data:

• China's December Manufacturing PMI 50.1 (expected 49.2; last 49.2) and Non-Manufacturing PMI 50.2 (expected 49.6; last 49.5). December RatingDog Manufacturing PMI 50.1 (expected 49.8; last 49.9)
• South Korea's December CPI 0.3% m/m (expected 0.2%; last -0.2%); 2.3% yr/yr, as expected (last 2.4%)
• Hong Kong's November M3 Money Supply 4.5% yr/yr (last 3.5%)
• Singapore's November Bank Lending SGD873.1 bln (last SGD866.1 bln)

Equity markets in Germany, Italy, and Switzerland are closed for New Year's Eve while markets in Spain, France, and the U.K. are headed for an early close. This has resulted in a quiet session for the markets that are still open. France's CAC (-0.5%) lags with Stellantis leading to the downside. STOXX Europe 600: +0.4% (+16.7% in 2025), Germany's DAX: CLOSED (+23.0% in 2025), U.K.'s FTSE 100: -0.2% (+21.4% in 2025), France's CAC 40: -0.4% (+10.2% in 2025), Italy's FTSE MIB: CLOSED (+31.5% in 2025), Spain's IBEX 35: -0.2% (+49.34% in 2025).

In economic data:

• Swiss November Official Reserve Assets CHF852.4 bln (last CHF844.9 bln)