Big Tech Pullback Weighs on US Stocks
Key Points
- Major US indexes slipped as megacap tech and AI leaders retreated from recent record highs
- Nvidia, Tesla and other AI-linked names led declines amid concern over lofty valuations
- Gold and silver slumped sharply from record levels, pressuring mining stocks
- Investors now look to Fed meeting minutes and key data in a thin holiday week
Indexes Ease Off Records as Year-End Rally Cools
US stocks fell on Monday, starting the final stretch of 2025 trading on a softer note after record highs late last week. The S&P 500 declined about 0.3% to 6,905.74, the Dow Jones Industrial Average lost roughly 0.5% to 48,461.93, and the tech-heavy Nasdaq Composite slipped around 0.5%. The Nasdaq 100 also finished lower. The pullback came after the S&P 500 and Dow set records during the shortened Christmas week, kicking off the so‑called Santa Claus rally period that typically spans the last five trading days of December and the first two of January. Despite Monday’s setback, all three major indexes remain on track to end 2025 with strong gains, with the S&P 500 up about 17% year to date, the Dow more than 14%, and the Nasdaq over 21%.
Megacap Tech and AI Leaders Lead the Decline
Losses were concentrated in heavyweight technology and AI-linked stocks that have driven much of this year’s advance. Nvidia fell about 1.2%, while Tesla dropped more than 3% after recently hitting a record high, making it one of the biggest decliners in the Nasdaq 100. Other AI-focused names also weakened, including Palantir Technologies, down about 2.4%, and Oracle, off roughly 1.3%. Trading Economics and other reports cited growing concerns about stretched valuations in the AI space and questions over whether heavy capital spending by software and data-center companies will deliver the returns investors expect. Most of the so‑called Magnificent Seven traded lower, with Meta Platforms, Amazon and Microsoft edging down, while Alphabet was little changed and Apple was roughly flat to slightly higher. Commenting on the broader tech move, Hank Smith of Haverford Trust said the current weakness was not the beginning of the end of tech dominance, pointing to strong growth, competitive moats and financial strength at top names, excluding Tesla.
Metals Slide Hits Miners as Energy Stocks Climb
Commodity-related sectors saw sharp moves. Precious metals reversed after recent record-setting rallies, with silver plunging as much as 7% after briefly topping $80 per ounce and gold futures falling more than 3% to over 4% on the day. The pullback followed what some reports described as parabolic gains, with higher margin requirements for metals trading also contributing to long liquidation. The slump weighed heavily on mining shares: Newmont dropped more than 5%, while other miners such as Hecla Mining, Coeur Mining and Freeport‑McMoRan also declined. In contrast, energy stocks outperformed as crude oil prices rose more than 2%. Companies including Exxon Mobil, Chevron, Devon Energy, Diamondback Energy, ConocoPhillips, Valero Energy, Occidental Petroleum and others advanced, helping limit broader market losses.
Macro Data, Fed Minutes and Light Holiday Volumes in Focus
The session unfolded against a backdrop of thin holiday trading and a light economic calendar. November pending home sales rose 3.3% month on month, the strongest increase since early 2023 and well above expectations, suggesting some improvement in housing demand. At the same time, the Dallas Fed’s December manufacturing outlook index fell more than expected, pointing to ongoing weakness in that region’s factory activity. Bond markets firmed, with the 10‑year US Treasury yield slipping to around 4.10%, a one‑week low, providing some support to equities. Looking ahead, investors are focused on the release of minutes from the Federal Reserve’s December meeting, due Tuesday, as well as weekly initial jobless claims and the Chicago PMI later in the week. With US markets operating on a holiday‑shortened schedule and volumes seasonally lower, several commentators noted that individual trades can have an outsized impact on prices as the year draws to a close.
Key Takeaways
- Monday’s decline was driven more by sector rotation and profit-taking in 2025 winners than by broad macro deterioration.
- AI and megacap tech stocks remain central to index performance, so modest moves in a few names continue to sway the broader market.
- Sharp reversals in precious metals and gains in energy highlight how quickly sentiment can shift across commodities in thin year-end trading.
References
- 1. https://finance.yahoo.com/video/us-stocks-end-down-tech-230811118.html
- 2. https://www.fool.com/coverage/stock-market-today/2025/12/29/stock-market-today-dec-29-stocks-slide-as-investors-lock-in-gains/
- 3. https://tradingeconomics.com/united-states/stock-market
- 4. https://ts2.tech/en/apple-stock-steadies-after-hours-as-year-end-trading-turns-choppy-fed-minutes-next/
Get premium market insights delivered directly to your inbox.