Tech Giants' Decline Weighs Heavily on Stock Market as Year Closes

Major U.S. stock indices faced significant headwinds on the final trading day of 2025, with the S&P 500 falling -0.15%, the Dow Jones Industrials declining -0.18%, and the Nasdaq 100 dropping -0.19%. Futures markets echoed this weakness, with March E-mini S&P contracts down -0.17% and March E-mini Nasdaq contracts down -0.22%. The Dow Jones Industrials retreated to a 1-week low while the Nasdaq 100 touched a 1.5-week low, signaling broad market vulnerability as investors navigated the holiday-shortened week.

Technology Sector Pressure Leads the Decline

The weakness in the Magnificent Seven technology stocks served as the primary driver of today’s selloff. Meta Platforms fell -0.64%, Microsoft dropped -0.31%, Amazon.com declined -0.29%, Apple retreated -0.24%, and Alphabet slipped -0.20%. Tesla showed minimal weakness at -0.04%. Nvidia proved to be an outlier, climbing +0.35% after Reuters reported the chip manufacturer approached TSMC to accelerate H200 artificial intelligence chip production in response to stronger demand signals from China, positioning it as a bright spot in an otherwise challenging day for the tech-heavy Nasdaq.

Commodity Markets and Mining Sector Suffer

Precious metals markets experienced notable weakness, with gold prices sliding to a 2.5-week low while silver prices plummeted more than -8%. This downturn rippled through the mining sector, where Newmont, Hecla Mining, and Coeur Mining each declined more than -1%, and Freeport-McMoRan fell -0.66%. The weakness across commodity-linked equities added to mounting pressure across the broader market.

Economic Data Signals Mixed Signals for Monetary Policy

U.S. weekly initial unemployment claims unexpectedly fell -16,000 to a 1-month low of 199,000, suggesting stronger labor market conditions than anticipated. This development proved hawkish for Federal Reserve policy expectations, contributing to a rise in the 10-year T-note yield, which climbed +3 basis points to 4.15%. March 10-year T-notes declined -6 ticks following the jobs data release, as investors reassessed rate cut probabilities. Markets currently discount only a 15% probability of a -25 basis point rate cut at the FOMC’s January 27-28 meeting.

International Economic Growth Provides Some Offset

China’s December manufacturing PMI rose +0.9 to 50.1, marking the fastest pace of expansion in 9 months and exceeding expectations of 49.2. The non-manufacturing PMI also advanced +0.7 to 50.2, surpassing forecasts of 49.6. These strength signals in Chinese economic activity provided some counterbalance to domestic weakness, though U.S. markets remained pressured by structural concerns.

Corporate Action Highlights

Several individual stocks drew attention on the trading day. Vanda Pharmaceuticals surged more than +24% after FDA approval of its Nereus drug for motion-induced nausea prevention. Terawulf Inc climbed more than +5% following a Keefe, Bruyette & Woods upgrade to outperform with a $24 price target. Nike advanced more than +2%, benefiting from insider buying signals after SEC filings showed CEO Hill purchasing approximately $1 million in shares. Conversely, Corcept Therapeutics plummeted more than -46% following FDA rejection of its relacorliant treatment for hypertension-related hypercortisolism, citing insufficient effectiveness evidence.

Looking Ahead

Trading volumes remained well below normal throughout the session as global markets observed holiday closures in Germany and Japan. Seasonal patterns historically favor equities during late December, with S&P 500 data showing a 75% positive frequency and 1.3% average gains over the final two weeks of the year since 1928. Market participants will monitor the December S&P manufacturing PMI, expected to remain at 51.8, as attention focuses on U.S. economic developments during this condensed trading week.