Tech Stocks Pull Market Lower as Year Draws to Close

The final trading day of 2025 painted a cautious picture for U.S. equities, with major indices feeling the weight of weakness in tech stocks. The S&P 500 declined -0.15%, while the Dow Jones Industrials retreated -0.18%, both marking notable setbacks on a shortened holiday week. The Nasdaq 100 bore the brunt of selling pressure, falling -0.19% and hitting a 1.5-week low. Futures markets reflected similar headwinds, with March E-mini S&P futures down -0.17% and March E-mini Nasdaq futures sliding -0.22%.

Magnificent Seven Under Pressure

The Magnificent Seven technology stocks emerged as the primary drag on the broader market, with most mega-cap names struggling to find traction. Meta Platforms fell -0.64%, Microsoft declined -0.31%, Amazon.com slipped -0.29%, Apple retreated -0.24%, and Alphabet edged lower by -0.20%. Tesla managed only a marginal -0.04% loss, bucking slightly softer trends. This weakness in tech stocks highlighted the sector’s outsize influence on overall market direction.

However, not all technology names moved in unison. Nvidia bucked the trend by rising +0.35%, emerging as a bright spot after Reuters reported the chipmaker approached TSMC to accelerate production of its H200 artificial intelligence processors. The catalyst pointed to signs of strengthening demand from China, suggesting potential momentum in AI-related infrastructure.

Mixed Signals from Economic Data

Labor market strength delivered an unexpected jolt to sentiment. U.S. weekly initial unemployment claims unexpectedly plunged -16,000 to reach a 1-month low of 199,000, defying forecasts for an increase to 218,000. While this demonstrated labor market resilience, the data triggered a hawkish repricing of rate cut expectations, pressuring equities and boosting bond yields.

The 10-year Treasury note yield climbed +3 basis points to 4.15% following the jobless claims surprise. Higher yields typically weigh on growth stocks, which bear particular sensitivity to discount rate shifts. March 10-year T-notes declined -6 ticks, with the yield pushing to 4.147% by midday.

Asian Economic Tailwinds

Offsetting domestic headwinds came stronger-than-expected Chinese economic signals. December’s manufacturing PMI rose +0.9 to 50.1, surpassing expectations of 49.2 and marking the fastest expansion pace in 9 months. Similarly, the non-manufacturing PMI climbed +0.7 to 50.2, beating forecasts of 49.6. These readings suggested resilience in global growth prospects at a critical juncture.

Mining Sector Struggles, Select Gainers Emerge

Commodity-linked stocks faced their own challenges as precious metals softened. Gold prices retreated to a 2.5-week low while silver plunged more than -8%, weighing on mining equities. Newmont, Hecla Mining, and Coeur Mining all declined more than -1%, while Freeport-McMoRan slipped -0.66%.

The session produced sharp disparities among individual names. Corcept Therapeutics cratered more than -46% after FDA rejection of its relacorliant treatment for hypertension. Conversely, Vanda Pharmaceuticals surged more than +24% on FDA approval of its Nereus motion sickness drug, while Terawulf Inc climbed more than +5% following an analyst upgrade. Nike rallied more than +2% in Dow Jones trading following insider buying signals from its CEO.

Seasonal Strength Ahead

Despite today’s pressure, historical data offered an encouraging perspective. According to Citadel Securities analysis, since 1928 the S&P 500 has risen 75% of the time during December’s final two weeks, averaging gains of 1.3%. Volumes remained subdued with German and Japanese markets closed for New Year’s holidays, likely contributing to constrained trading activity and narrow moves.

Markets now await Friday’s December S&P manufacturing PMI reading, expected to hold steady at 51.8. Fed rate cut odds for the January 27-28 meeting currently stand at just 15% for a -25 basis point reduction, reflecting the hawkish lean imparted by stronger labor data.