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Futures up: Dow 0.46%, S&P 500 0.57%, Nasdaq 0.75%

Jan 2 (Reuters) - U.S. stock index futures edged higher

before the first trading session of 2025, with investors hoping

a new political landscape and more interest rate cuts will

enliven corporate and economic performance.

At 05:23 a.m. ET on Thursday, Dow E-minis were up

198 points, or 0.46%, S&P 500 E-minis were up 34 points,

or 0.57%, and Nasdaq 100 E-minis were up 160.25 points,

or 0.75%.

Wall Street's main indexes logged stellar gains in 2024 and

the benchmark S&P 500 notched its best two-year run since

1997-1998.

The main catalysts were the Fed easing interest rates for

the first time in four years, investor hype around artificial

intelligence and expectations of companies potentially

benefiting from President-elect Donald Trump's policies.

Equity valuations are sitting above their long-term

averages, but could be justified if corporate profits stay

strong. Earnings per share for S&P 500 companies are projected

to rise 10.67% in 2025, according to data compiled by LSEG.

Brokerages expect the S&P 500 to touch levels between 6,000

and 7,000 points this year, up from Tuesday's close of 5,881.

However, 2024's surge ended with the benchmark index and the

Dow posting monthly declines in December as markets

priced in Trump's proposals on corporate tax cuts, loose

regulations, stricter immigration laws and tariffs to be

inflationary and likely to slow down the pace of the Fed's

monetary policy easing this year.

With inflation still above the 2% target, traders see the

central bank leaving interest rates unchanged at its meeting

later this month, and expect borrowing costs to be lowered by a

total of 50 basis points by year-end, according to the CME

Group's FedWatch Tool.

Markets also weighed the likelihood that the new

administration could issue more debt to finance its policies,

which could worsen market volatility. The yield on the 10-year

benchmark Treasury note hovered near its eight-month high.

"Investors are hopeful that a goldilocks scenario will be

the story of 2025, amid promises of lower taxes and the

deregulation under a second Trump presidency," said Susannah

Streeter, head of money and markets at Hargreaves Lansdown.

"But with fresh trade wars looming, if the worst of the

tariff threats are imposed, the bears could be back to disrupt

what has been a fairytale performance for the U.S. stock

market."

On Thursday, traders will be eying a report on weekly

jobless claims, followed by a final estimate on manufacturing

activity in December, but the main focus will be a slew of labor

market data next week.

In premarket trading, Tesla added 1.3% ahead of the

release of its quarterly deliveries numbers.

Among other megacaps, Meta and Amazon.com ( AMZN )

added 0.8% each, while chip stocks Nvidia ( NVDA ) and Broadcom ( AVGO )

climbed 1% and 1.9%, respectively.

These stocks were among the ones behind the S&P 500 Growth

index's 35% jump in 2024. The Value index rose 9.8%.

SoFi Technologies ( SOFI ) dropped 2.4% after brokerage KBW

downgraded the stock to "underperform" from "market perform".

In a week shortened by Wednesday's New Year's holiday,

trading volumes are expected to be light.