Wall Street Slips as ‘Santa Rally’ Hopes Fade; Tech and Financials Lead Declines

U.S. equity markets began the final, holiday-shortened trading week of 2025 on a softer note, dampening hopes for a seasonal “Santa Claus rally” as major indexes pulled back from recent highs. Low trading volumes and a pause in major economic catalysts have contributed to caution among investors ahead of key data releases.

Major Indexes Slide at Start of Week

On Monday, the Dow Jones Industrial Average fell by 249.04 points, or 0.51%, closing at 48,461.93, while the S&P 500 slipped 24.20 points, or 0.35%, to finish at 6,905.74. The tech-heavy Nasdaq Composite lost 118.75 points, or roughly 0.5%, ending at 23,474.35 — reflecting broad weakness across both cyclical and growth sectors.

Despite the Monday downturn, all three main indexes remain significantly above their levels earlier in the year, with the S&P 500 up nearly 17% in 2025. This performance underscores the resilience of U.S. markets even as short-term technical pullbacks occur.

Sector and Stock Highlights

Within the Dow, nine components finished in positive territory while 20 closed lower. Consumer giant Walmart led the gainers with a 0.71% rise, followed by Chevron (+0.65%) and Walt Disney (+0.55%) showing relative strength. Financial stocks faced pressure, with Goldman Sachs down 1.64%, American Express off 1.50%, and JPMorgan Chase losing 1.27%.

The technology sector, which has been central to market gains throughout 2025, also saw weakness. Industry leaders such as Nvidia and Tesla shed ground, contributing to broader sector drag. This aligns with market data showing tech stocks cooling following a period of sustained leadership in the rally.

Corporate Developments

In corporate news, tech heavyweights made headlines. Intel disclosed completion of a $5 billion share sale to Nvidia, part of a collaborative push into advanced CPUs for data centers and personal computing, though Nvidia will not use Intel’s manufacturing arm. The deal reflects ongoing restructuring within the semiconductor industry as firms seek strategic partnerships to compete in AI hardware.

At athletic apparel maker Lululemon, founder Chip Wilson initiated a boardroom challenge by nominating three new director candidates amid the company’s search for a successor to CEO Calvin McDonald, who plans to step down in January 2026. Wilson holds an 8.4% stake in the company, and his activism highlights growing governance scrutiny across U.S. corporates.

Shares of alternative asset manager DigitalBridge Group surged, fueled by reports of advanced acquisition talks with Japanese technology investor SoftBank. The potential deal underscores investor enthusiasm for digital infrastructure assets amid rising demand for AI computing capacity and data centers. Meanwhile, analysts from Evercore ISI named Amazon a “top pick” for 2026, citing strong growth prospects in AWS, advertising revenues, and emerging AI chip demand.

Commodities and Fixed Income

In commodities markets, crude oil prices climbed as traders balanced expectations of production cuts with geopolitical risks in the Middle East. Brent crude futures rose about 2.2% to trade above $61.50 per barrel, while West Texas Intermediate crude gained roughly 2.4% to exceed $58.00, reflecting renewed energy demand amidst supply concerns.

Precious metals saw sharp pullbacks after recent high levels. Gold futures dipped more than 4% to around $4,300 per ounce and silver tumbled roughly 8% following increased margin requirements on the Chicago Mercantile Exchange. Elon Musk sparked fresh speculation by warning on social media about potential silver export restrictions from China, highlighting the metal’s industrial importance and market sensitivity.

In the bond market, volatility measures such as the ICE BofA MOVE Index fell to levels unseen since October 2021, suggesting a significant decrease in expected Treasury market volatility. This trend reflects easing recession fears as investors anticipate Federal Reserve interest rate cuts in 2026, contributing to a calmer fixed income environment.

Economic Indicators to Watch

On the economic data front, pending home sales in the U.S. recorded a stronger-than-expected increase in November, jumping 3.3% — the largest rise in contract signings since early 2023. The report from the National Association of Realtors suggests that lower mortgage rates are beginning to entice buyers back into the housing market, reinforcing signs of recovery in key real estate segments.

“All regions of the country saw an increase in home sales last month, with the West posting the largest monthly gain at 9.2%,” said Lawrence Yun, chief economist at the NAR, pointing to strengthening homebuyer momentum.

Outlook as 2025 Closes

As 2025 draws to a close, Wall Street finds itself in a familiar state of cautious optimism. Year-to-date gains remain substantial despite recent dips, and investor focus is turning to minutes from the Federal Reserve’s latest meeting and upcoming unemployment claims data, which could shape expectations for monetary policy in 2026.

With the traditional Santa Claus rally window underway, markets will be watching whether seasonal strength can offset near-term volatility — even as broader economic indicators and corporate developments continue to influence sentiment into the new year.