Wall Street ticks lower in light trading ahead of the final opening bell of 2025
Wall Street was down before the opening bell, heading for the fourth day of losses, the last trading day of 2025, a banner year for markets driven by both optimism and uncertainty.
The future of the S&The P 500 and the Dow Jones Industrial Average each fell 0.1% early Wednesday. Nasdaq futures were down 0.2%.
Institutional investors have largely liquidated their positions for the year, so trading is expected to be extremely light. American markets will be closed Thursday for New Year’s Day.
THE&The P 500 is up more than 17% this year as investors have embraced artificial intelligence technology, both in the sector and its potential in almost every other sector.
The AI frenzy that has driven the markets in 2025 has not been without concern. Chief among them is the fear that artificial intelligence technology will not generate enough profits and productivity to make all the investments worth it. That could keep pressure on AI stocks like Nvidia and Broadcom, which are driving much of the market’s gains this year.
And it’s not just AI stocks that critics say are too expensive. Stocks in the market still look expensive after their prices rose faster than earnings.
In addition to concerns about overvalued stocks, the ongoing impact of a large-scale U.S.-led trade war threatens to further fuel U.S. inflation. Even though the Federal Reserve cut its benchmark policy rate three times to close out the year, inflation remains solidly above the central bank’s 2% target.
Fed officials cited concerns about a weakening labor market to justify their decision to cut rates. The Labor Department’s most recent data on weekly unemployment claims, which are considered a proxy for layoffs, will arrive later Wednesday.
The Fed has been more cautious going forward. Minutes from its December meeting reflect divisions within the central bank as it faces uncertainty over threats to the economy.
Wall Street is betting that the Fed will keep interest rates steady at its next meeting in January.
Sung Won Sohn, a professor of finance and economics at Loyola Marymount University, says uncertainty is brewing in global markets due to inflation, labor shortages and questions about the possible direction of interest rates.
“Central banks must act cautiously, and financial markets will likely experience continued volatility as expectations evolve,” he said.
“For businesses, investors and policymakers, flexibility, risk management and close attention to economic signals will be essential to meet the challenges ahead.”
Precious metals trading remained volatile at the end of the year. Silver returned to a big loss, dropping more than 8% early Wednesday after a gain of more than 10% on Tuesday. After Friday’s 7.7% jump, silver lost nearly 9% on Monday. That’s another increase of more than 140% this year.
Gold fell 1.5% on Wednesday morning but is still up 66% in 2025.
Elsewhere, global stock markets, including those of Germany, Japan and South Korea, were closed Wednesday for the New Year holiday, while trading was mixed in those that remained open.
The French CAC 40 lost 0.5% at midday, while the British FTSE 100 lost 0.2%.
Earlier in Asia, the Hang Seng Index fell 0.9% to 25,630.54, while the Shanghai Composite Index rose 0.1% to 3,968.84. The Taiex in Taiwan jumped 0.9% to 28,963.60. In Australia, the S of Sydney&The P/ASX 200 fell less than 0.1 per cent to 8,714.30.
Trade in Tokyo was to be closed on Thursday and Friday for the New Year holiday and reopen on Monday. In South Korea, trading was scheduled to be closed on Thursday.
U.S. crude rose 31 cents to $58.26 a barrel. Brent crude, the international standard, added 28 cents to $61.61 a barrel. Yet unlike other commodities, crude oil prices have fallen this year. A barrel of crude now costs 19% less than at the start of the year, and gas prices are down 6 to 7% nationally, or about 20 cents a gallon.
