U.S. stocks declined in quiet trading on December 29, 2025, as markets entered the final stretch of the year with just two trading sessions remaining. The S&P 500 fell 0.3% to 6,905.74, while the Dow Jones Industrial Average dropped 0.5% to 48,461.93 and the Nasdaq composite lost 0.5% to 23,474.35.
Despite Monday's losses, the broader market maintains substantial annual gains. The S&P 500 remains up more than 17% for 2025 and is on track for its eighth consecutive monthly gain. Markets will close Thursday for New Year's Day, leaving only two trading days to complete the year.
Technology stocks with outsized valuations weighed heaviest on Monday's session. Nvidia fell 1.2% and Broadcom declined 0.8%, continuing a pattern of volatility that began in November. AI-driven companies that propelled markets to record highs throughout 2025 have shown increased instability as the year concludes.
Investors have seemingly become more skeptical about whether massive AI investments will deliver proportional returns, according to market analysts. Companies focusing on artificial intelligence have become some of the world's most valuable, but recent trading patterns suggest concerns about eventual payoffs justifying current valuations.
Energy stocks bucked the downward trend, gaining alongside rising oil prices. U.S. benchmark crude jumped 2.4% to settle at $58.08 per barrel, while Brent crude rose 2.1% to $61.94. Exxon Mobil advanced 1.2% as the sector benefited from higher commodity prices.
Precious metals retreated sharply after the Chicago Mercantile Exchange increased margin requirements for traders. Gold prices fell 4.6% and silver slumped 8.7%, though both metals maintain exceptional 2025 performance with gold up approximately 64% and silver more than doubling for the year.
Treasury yields continued their downward trajectory, with the 10-year Treasury falling to 4.11% from 4.13% on Friday. Yields have declined significantly throughout 2025, reflecting Federal Reserve interest rate cuts implemented earlier this year to address slowing job growth.
The Fed reduced its benchmark rate three times in 2025, attempting to balance stubborn inflation above its 2% target against weakening employment data. This policy approach risks exacerbating inflation while attempting to stimulate economic activity through cheaper borrowing costs.
International markets presented a mixed picture. Taiwan's Taiex gained 0.9% despite Chinese military exercises around the self-governed island, while Hong Kong's Hang Seng fell 0.7% after surrendering early gains. European and Asian markets showed divergent performance as global investors positioned for year-end.
The technology sector's late-year volatility contrasts with its dominant performance through most of 2025. AI optimism drove record-setting rallies earlier in the year, but December's modest gains and November's declines signal shifting sentiment as investors evaluate long-term profitability prospects.
With only two trading days remaining in 2025, Monday's quiet session reflects typical year-end patterns of reduced volume and limited market-moving news. The broader annual gains remain largely intact despite recent technology sector pressure and precious metals volatility.
Market participants now focus on 2026 positioning while navigating the Federal Reserve's delicate balance between inflation control and economic support. The technology sector's performance in early January will provide critical signals about whether AI enthusiasm can sustain its momentum into the new year.
