Wall Street kicked off the last trading week of 2025 on a dour note yesterday, as heavyweight tech and artificial intelligence (AI)-linked stocks retreated from last week’s gains that had lifted the S&P 500 to a record high.
The benchmark index came within the 1% range of a historic 7,000-point mark and the Dow closed at a record high last week, with some investors eyeing a “Santa Claus rally”, a seasonal phenomenon where the S&P 500 typically posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.
“As we near the year-end, investors are facing a dilemma: if this is the year that AI is about to take off, will the US stock market outperform once more?” said Kathleen Brooks, research director at XTB.
“If the answer is yes, then the end of year malaise could make way for U.S. stock indices to play catch-up early in 2026,” Brooks said.
The indexes are set for robust monthly gains in December, with the S&P 500 and the Dow on track for their eighth consecutive month of gains, their longest monthly winning streak since 2017.
At 5.34am, Dow E-minis were up 10 points, S&P 500 E-minis were down 0.25 points and Nasdaq 100 E-minis were up 1 point.
On the docket are minutes from the Federal Reserve’s (Fed) Dec 9-10 meeting, where it delivered an expected 25-basis-point cut, and took a cautious stance on further reductions until there was more clarity on the health of the US labour market.
However, mild economic data since then and expectations of a new dovish Fed chair has fueled optimism around further US interest rate cuts in 2026.
The S&P 500 has added about 17% so far this year, as the frenzy to capitalise on AI helped the US benchmark overtake Europe’s STOXX 600, despite investors diversifying away from US stocks earlier in the year.
Among stocks, miners stabilised today after declines in the previous session, tracking a sharp pull back in gold and silver prices.
Newmont and US-listed shares of Barrick Mining gained about 1.8% each, and the Global X Silver Miners ETF was up 1.4% in premarket trading.
Trading volumes are expected to be light in the holiday-affected week with US markets shut on Thursday for New Year’s Day.