U.S. stocks struggled on Wednesday as Wall Street entered the final trading hours of a turbulent yet ultimately profitable 2025. All three major indexes hovered slightly lower, extending a late-December pullback that has lowered hopes for a classic Santa Claus rally.
The Dow Jones Industrial Average slipped roughly 0.3%, while the S&P 500 and tech-heavy Nasdaq Composite each fell around 0.2% to 0.3%. Despite the late stumble, the major benchmarks remain firmly on track to finish the year with strong gains, capping a roller-coaster stretch marked by tariff shocks, sharp rotations, and a relentless debate over AI-driven valuations.
Market Movers:
- Trump Media & Technology Group (DJT) +7%: Shares jumped after the company announced plans to distribute digital tokens to shareholders through a partnership with Crypto.com. The move added fuel to speculative interest, with investors betting the token rollout could boost engagement across Trump Media’s digital platforms in 2026.
- Silver Futures (SI=F) +10%: Silver rebounded sharply following its steepest one-day drop in more than five years, as traders stepped back into the metals trade after heavy liquidation. The bounce reflected continued optimism around industrial demand tied to AI infrastructure, electrification, and constrained global supply.
- Gold Futures (GC=F) +1%: Gold edged higher as investors reassessed the precious metals sell-off earlier this week. The metal remains near record territory, supported by central bank buying, a weaker dollar, and expectations for lower interest rates next year.
- Bitcoin (BTC-USD) -1%: Bitcoin drifted lower as it headed for a rare negative year, weighed down by long liquidation and profit-taking after October’s all-time highs. Analysts, however, continue to point to potential technical stabilization heading into January.
A Year-End Reality Check for Equities
While December’s pullback has slowed momentum, it has done little to erase the broader strength seen across markets in 2025. The S&P 500 is up more than 17% for the year, the Nasdaq has surged over 20%, and the Dow has climbed roughly 13%, reflecting resilient earnings growth and easing inflation pressures. Still, the road was far from smooth. Stocks briefly flirted with bear market territory earlier this year after sweeping U.S. tariffs rattled global markets. At the same time, concerns over stretched AI valuations and geopolitical risks periodically triggered sharp sell-offs. Each time, buyers stepped back in.
Fed Policy and the 2026 Question
Attention now shifts toward the Federal Reserve as investors look ahead to the new year. Minutes from the Fed’s December meeting showed policymakers were divided over the timing of future rate cuts, with many officials signaling it could be “some time” before further easing is warranted. Markets are currently pricing in a strong likelihood that the Fed will hold rates steady in January, with debate intensifying around March. The upcoming transition to a new Fed chair later in 2026 adds another layer of uncertainty to the policy outlook.
Looking Ahead
As trading calendars reset, investors will be weighing optimism for continued earnings growth against lingering risks tied to monetary policy, geopolitics, and lofty valuations. With Wall Street broadly expecting stocks to extend their gains in 2026, the focus will quickly shift from year-end reflection to whether the market can sustain its momentum — or whether volatility returns just as quickly in the months ahead.
