[New York Stock Exchange] Santa Rally Falters as Tech Stocks Weaken... Silver Price Drops 9% After Surpassing $80

AI-Related Stocks Weaken as Investors Scale Back Exposure to Major Tech
Precious Metals Retreat After Surge: Silver Down 9%, Gold Down 4%
Market Focus Turns to FOMC Minutes Release on the 30th

All three major U.S. stock indices fell simultaneously on December 29 (local time), the first trading day of the final week of 2025. As the year-end approaches, investors reduced their portfolio allocations to large-cap tech stocks, putting downward pressure on the indices overall. The price of silver, which had hit an all-time high the previous day, reversed course and weakened within a single day.

A trader is working on the floor of the New York Stock Exchange (NYSE) in the United States. Photo by AFP Yonhap News.

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 48,461.93, down 249.04 points (0.51%) from the previous session. The S&P 500, which tracks large-cap stocks, ended down 24.2 points (0.35%) at 6,905.74, while the tech-heavy Nasdaq Composite fell 118.748 points (0.5%) to close at 23,474.349.

By sector, stocks related to artificial intelligence (AI) faced particularly strong downward pressure. Nvidia dropped 1.21%, and Broadcom declined by 0.78%. Palantir plunged 2.4%, while Oracle and Meta, the parent company of Facebook, also slipped by 1.32% and 0.69%, respectively.

Regarding the weakness in tech stocks, Joe Mazola, Head of Trading and Derivatives Strategy at Charles Schwab, commented, "This week's weakness is a reversal of the trend where tech stocks led gains last week," adding, "It does not appear to be a correction driven by any specific single fundamental factor."

Chris Larkin, Head of Trading and Investing at Morgan Stanley E*TRADE, stated, "With few major economic indicators scheduled for release this week, the key focus for the market will be internal upward momentum," and added, "If stocks are to end the year with double-digit gains, the role of tech stocks will be crucial."

Precious metal prices also underwent corrections. International silver prices, which surpassed $80 per ounce the previous night due to speculative trading and supply shortage concerns and set a new all-time high, plunged 9% within a day. Gold prices also dropped by more than 4% as overbought signals became more pronounced. The market appears to have entered a correction phase amid concerns of overheating following a rapid short-term surge.

This trend emerged after the S&P 500 set an intraday all-time high on December 26 and then closed slightly lower. This year, major indices on the New York Stock Exchange recorded double-digit gains. The S&P 500 rose 17% compared to the beginning of the year, while the Dow Jones and Nasdaq climbed by approximately 14% and 21%, respectively.

With the market showing weakness on this day, the so-called "Santa Claus Rally," which had been anticipated ahead of the year-end, has yet to clearly materialize. Traditionally, the Santa Rally period is considered to be the last five trading days of December and the first two trading days of January. Since 1950, the S&P 500 has risen during this period 78% of the time, with an average return of 1.3%.

The biggest focus for the market this week is the minutes of the December Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve, which will be released at 2 p.m. on December 30. Investors are expected to look for clues about the FOMC members' economic outlook and the path of benchmark interest rates for next year. Previously, at the regular FOMC meeting on December 10, the Fed cut the benchmark interest rate by 0.25 percentage points, adjusting it to a range of 3.5% to 3.75% per annum.

Whether the AI boom that fueled the stock market this year will continue into next year is also a key point to watch. Richard Flax, Chief Investment Officer (CIO) at Moneyfarm, noted, "In 2026, the question of whether AI is a bubble will remain the most important topic for investors," adding, "Given the current scale of investment and pace of innovation, even skeptics will find it difficult to ignore the impact on the market and the real economy."

U.S. Treasury yields were slightly lower. The yield on the 10-year U.S. Treasury, the global benchmark for bond yields, stood at 4.10%, while the yield on the 2-year Treasury, which is sensitive to monetary policy, was at 3.45%, both down 2 basis points (1bp = 0.01 percentage point) from the previous session.