[New York Stock Market] All Stocks Close Lower on First Trading Day of the New Year... Tesla Plummets 6%

The three major indices of the U.S. New York stock market all closed lower on the first trading day of 2025, January 2 (local time), hovering around the flat line. This was due to a flood of profit-taking sales, disappointment over the missing Santa rally, a strong dollar, and volatility in the bond market. The tech-heavy Nasdaq index continued its five-day losing streak, with Tesla, considered a so-called 'Trump beneficiary stock,' falling more than 6%.

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On that day at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average closed at 42,392.27, down 151.95 points (0.36%) from the previous session. The large-cap S&P 500 index fell 13.08 points (0.22%) to 5,868.55, and the Nasdaq index dropped 30.00 points (0.16%) to 19,280.79.

Within the S&P 500, seven sectors declined, excluding energy, healthcare, communication, and utilities. Tesla fell more than 6% after its annual vehicle deliveries decreased for the first time since 2011. Apple also dropped 2.62%. In contrast, Nvidia, the leader in artificial intelligence (AI), surged nearly 3%, attempting to offset the declines of other big tech companies. Unity Software rose 5% following a post by individual investor Keith Gill, known as 'Roaring Kitty.'

The market started the first trading day of the new year on an upward trend. However, led by Tesla's weakness due to disappointing annual vehicle deliveries, combined with profit-taking and disappointment over the missing Santa rally, volatility increased and the mood reversed. Economic media CNBC noted that the Dow index fluctuated more than 700 points from its high to low on that day.

Angelo Kourkafas of Edward Jones told CNBC, "If you think of the market as taking two steps forward and one step back, 2024 was a truly outstanding year, and now we are in the step-back phase." He added, "We are seeing the market adjust from an overbought condition in the short term." Jay Hatfield, portfolio manager at Infrastructure Capital, pointed to Tesla's weakness after its sharp rise in the second half of last year, saying, "It will impact the overall sentiment of tech stocks."

Volatility was also confirmed in the bond market. The yield on the U.S. 10-year Treasury note, a global benchmark, briefly approached 4.6% before settling around 4.56%. The 2-year yield, sensitive to monetary policy, hovered near 4.24%. Barry Knapp, research director at Ironside Macroeconomics, appeared on CNBC's The Exchange and said, "There is still significant headwind in the bond market."

The strong dollar also pressured the stock market. The Dollar Index, which measures the value of the U.S. dollar against six major currencies, surpassed the 109 level, marking its highest point since November 2022. Along with this, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's fear gauge, jumped 3.80% to surpass the 18 level compared to the previous session.

Peter Cardillo, chief economist at Spartan Capital Securities, emphasized, "There are obstacles remaining in the market over the next few weeks," and stressed the need to closely watch upcoming economic indicators and corporate earnings.

The weekly initial jobless claims released that morning showed a decline, indicating stability in the labor market. According to the U.S. Department of Labor, initial unemployment insurance claims for the week of December 22?28 totaled 211,000, down 9,000 from the previous week. This is the lowest figure in eight months since late April last year and below the expert forecast of 225,000. Continuing claims for unemployment benefits, representing those claiming for two weeks or more, stood at 1,844,000 for the week of December 15?21, down 52,000 from the previous week.

International oil prices surged nearly 2% on expectations of economic stimulus in China. On that day at the New York Mercantile Exchange, the front-month February delivery West Texas Intermediate (WTI) crude oil closed at $73.13 per barrel, up $1.41 (1.97%) from the previous session. The global benchmark Brent crude for March delivery closed at $75.93 per barrel, up $1.29 (1.73%) from the previous session.