Overview
On Monday, December 29, 2025, the U.S. stock market closed lower. Year-end adjustments saw investors reducing their positions in major tech stocks, resulting in a broad-market softening. While gold hit historic highs, it later experienced a sharp downturn. The S&P 500 index dropped by 0.3% as tech giants like Tesla, NVIDIA, and Meta led the decline. However, the energy and telecommunication sectors rose, buoyed by a fall in the 10-year bond yield. In contrast, materials, consumer discretionary, and financial sectors lagged.
| Nasdaq Composite | S&P 500 |
| Dow Jones Industrial Average | 1 South Korean won equals |
A Major News Story
The S&P 500's decline was intensified by substantial drops in major tech stocks such as Tesla, NVIDIA, and Meta. Conversely, the energy and telecommunication sectors saw gains owing to the decreased yield on 10-year bonds. Gold prices, after breaching the $80 per ounce mark, plummeted by over 5%, driven by profit-taking and low liquidity from year-end speculation. The increase in margin requirements for metal futures contracts by CME also contributed to the downward pressure.
Despite significant drops, analysts like Miller Tabak suggest that today's market correction is not alarming, viewing it as a result of high short-term overbought conditions. One notable economic indicator released on Monday was the substantial increase in pending home sales, marking the largest rise since early 2023, indicating a growing demand in the housing market.
Tomorrow's Economic Indicators
| Time | Event |
|---|---|
| 22:15 | U.S. ADP Weekly Employment Report |
| 23:45 | U.S. Chicago PMI |
| TBA | U.S. Baker Hughes Total Rig Count |
| TBA | U.S. FOMC Meeting Minutes |
General Opinion
Analysts from Miller Tabak emphasized that today's significant drop isn't a serious issue, given the market's recent overbought status. Attention this week will be on the release of the Federal Reserve's meeting minutes, expected to provide further insights into the Fed's policy course in January. Despite divergent views among Fed members, market sentiment leans towards an 80% probability of rate stability next month, though March's decisions remain widely debated.
Optimistic forecasts for 2025 continue to gain traction, with Wall Street strategists projecting an average 9% additional growth for the S&P 500 next year, despite potential risks from unexpected policy shocks and other growth determinants. Jason Pride from Glenmede believes 2025 will likely see continued economic growth, supported by favorable conditions like trade policy, fiscal stimulus, labor market changes, AI-driven productivity improvements, and regulatory relaxation.
