The Dow Jones Industrial Average, S&P 500, and Nasdaq each opened down 0.6%. However, the quantum computing sector showed strength, with Rigetti Computing rising 9.9% and Quantum Computing increasing 5.9%.

As of 09:40 AM, EST (or 05:40 PM in Riyadh), the broad-based S&P 500 index(SPX.US) ebbs by 44 points or 0.73% to 5,993, the tech-heavy NASDAQ(IXIC.US) deflates by 242 points or 1.21% to 19,778, and the blue-chip Dow Jones Industrial Average(DJI.US) shrinks by 179 points or 0.41% to 43,147.

KULR Technology Group Inc(KULR.US), an aerospace technology company, surged 11.7%. This followed a more than 40% increase the day before, as the company reported buying 217 Bitcoins.

Kingsoft Cloud Holdings(KC.US) jumped 16.7%, with its H-shares soaring up to 44% during intraday trading to reach a new high.

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A Winning Week

The S&P 500 Index is projected to rise 1.8% this week. On Thursday, the S&P 500 closed flat while the tech-heavy Nasdaq 100 Index fell 0.1%. Mixed unemployment data during the post-holiday trading session failed to alter market expectations for Federal Reserve policy.

Data showed that regular unemployment claims in the US rose to their highest level in over three years, indicating longer times for the unemployed to find new jobs. Initial unemployment claims fell to 219,000 for the week ending December 21.

Analysts suggest that the market may change direction as investors return from the holidays and reassess the inflation risks of a highly valued US stock market as President Trump takes office.

John Belton, portfolio manager at Gabelli Funds, stated in a report to clients, "The excitement is tempered by high valuations and a range of unknown factors. If the Trump rally fades temporarily, we would not be surprised."

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Fed Hike Merge Again?

In the bond market, US Treasury yields rose due to elevated expectations for Fed rate hikes. The 10-year US Treasury yield climbed to 4.607% on Friday, the highest since May.

The 2-year US Treasury yield, a key indicator of interest rate expectations, was around 4.33%. US debt trends have also driven up Eurozone bond yields, with Germany's benchmark 10-year bond yield rising 5 basis points to 2.372%.

The US dollar is on track for its best performance in nine years.

In the currency market, the US Dollar Index (which measures the greenback against major competitors) rose 0.08% to 108.16, nearing a monthly gain of 2.2% and an annual increase of 6.6%, its best performance since 2015. Trump's election and the Fed's patient policy have bolstered the dollar's strength this year.

The dollar is also approaching a monthly rise of 5.5% against the yen and is expected to gain 11.8% against the yen for 2024, while the euro nears its lowest point in two years.

Meanwhile, Fed Chairman Jerome Powell indicated earlier this month that officials would "remain cautious about further rate cuts," following anticipated quarterly rate decreases. The US economy will also face the impacts of President-elect Trump after his inauguration this month.

The market expects the Fed to cut rates by 37 basis points in 2025, but rate cuts are not fully priced in by money markets until June. By that time, the European Central Bank is expected to lower the deposit rate to 2% due to Eurozone economic slowdown.

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Wells Fargo: Disconnect Between Stocks, Economic Data Intensifies

For the US stock market, 2024 has been a remarkable year. However, according to Wells Fargo, post-election optimism could lead to a "hangover" effect for equities, with the S&P 500 possibly declining by 7%.

In a report on Monday, the bank highlighted the increasing disconnect between the stock market and economic data. US indices have surged post-election, while economic data remains lukewarm.

The Bloomberg US Economic Surprise Index, which tracks the relationship between economic data releases and market expectations, hovers slightly above zero. This suggests that despite optimistic market sentiment, economic data has provided few surprises in recent months.