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Futures up: Dow 0.21%, S&P 500 0.29%, Nasdaq 0.36%

Dec 31 (Reuters) - U.S. stocks index futures edged

higher in the last trading session of 2024, continuing its bull

run from more than two years ago on signs of post-pandemic

economic resilience, hopes of lower borrowing costs and AI

boost.

The S&P 500, Dow and Nasdaq are near

record highs and are on track to end higher for a second

straight year.

A nearly 100-basis point cut in interest rates in 2024 by

the Federal Reserve and a rally in technology stocks in

anticipation of boost to corporate profits from artificial

intelligence powered a strong surge in equities in 2024.

The S&P 500 tech, communications services

and consumer discretionary have jumped more

than 30% this year.

Although AI poster-child Nvidia's ( NVDA ) nearly 170% surge

this year was smaller compared with last year, the rally helped

the company notch $3 trillion in market value, while Tesla

reclaimed $1 trillion level.

At 05:45 a.m. ET, Dow E-minis were up 90 points, or

0.21%, S&P 500 E-minis were up 17 points, or 0.29% and

Nasdaq 100 E-minis were up 75.25 points, or 0.36%.

Nvidia ( NVDA ) was up 0.7%, while the Elon Musk-led automaker added

1.6% in premarket trading. Moves are expected to be influenced

by thin volumes ahead of New Year's holiday on Wednesday.

"It's also normal to start thinking that the AI rally will

one day fizzle out...but still, all those who called for a

correction have so far happened to be wrong, and Wall Street

analysts spent the year rising their price targets," said Ipek

Ozkardeskaya, senior analyst, Swissquote Bank.

Toward the end of the year, risk-taking improved as Donald

Trump's presidential win boosted bets that he would deliver on

his promises to ease regulations, cut taxes and raise tariffs to

help domestic businesses.

His win also powered small-cap stocks. The Russell 2000

clinched a record high, setting it up for a rise of about

10% - its second consecutive annual gain. Banks also

have benefited and are up more than 30% this year.

However, equities hit a rough patch in December, putting

the S&P 500 on course for its biggest monthly decline since

April, due to higher yields on Treasury notes at a time when

equity valuations are stretched and the Fed is cautious.

The yield on the benchmark 10-year note has come

off its seven-month high and is at 4.5%, as markets see Trump's

plans as inflationary, potentially slowing the pace of the Fed's

rate cuts.

Traders expect the central bank to deliver its first rate

cut of 2025 in either March or May, according to the CME Group's

FedWatch Tool.

Trump's win has also proved to be a tailwind for crypto

stocks as bitcoin prices touched $100,000.

MicroStrategy ( MSTR ) shares have more than tripled in

value this year as it continues buying and holding bitcoin. The

stock rose 3.3% on Tuesday, while Coinbase and MARA

Holdings ( MARA ) added 1% and 0.6%, respectively.

Other areas of the market, however, have witnessed annual

declines, with materials stocks down more than 2%,

hurt by the economic woes in top metals consumer China.