NEW YORK, Dec 29 (Reuters) – U.S. stocks dipped on Monday and gold pulled back from record highs at the top of a holiday-shortened week.
The three major U.S. stock indexes were weighed down by weakness in tech and materials stocks, while Treasury yields eased and the dollar hovered near its lowest in almost three months, reflecting expectations of further Federal Reserve interest rate cuts next year.
“It’s a very light trading week ahead; volume is low, so therefore any kind of activity could push the index one way or the other,” said Sam Stovall, chief investment strategist of CFRA Research in New York. “Possibly you have people who have decided to sell and they want to do some tax loss harvesting.”
Market participants were closely monitoring negotiations between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy, with Trump saying they were getting “a lot closer” to a deal that could end Russia’s war on Ukraine. Hopes for a deal dimmed after Russian authorities said Ukraine tried to attack President Vladimir Putin’s residence, in a potential roadblock to further negotiations.
With just three sessions remaining, U.S. and global stocks were on course to end 2025 near record highs, having notched double-digit gains in a tumultuous year dominated by tariff wars, central bank policy and simmering geopolitical tensions.
“We started the year worried that we could be thrown into a recession because of the tariffs,” Stovall added, but the tariffs’ on-again, off-again activity helped allay those fears.
“We’ll see what the final tally brings, but this will certainly be the (stock market’s) third year of a double-digit gain,” Stovall said.
The Dow Jones Industrial Average fell 219.42 points, or 0.46%, to 48,489.11, the S&P 500 fell 24.21 points, or 0.35%, to 6,905.73 and the Nasdaq Composite fell 117.42 points, or 0.50%, to 23,474.13.
European stocks steadied near all-time highs as gains in basic resources firms were counterbalanced by weakness in defense stocks.
MSCI’s gauge of stocks across the globe fell 2.06 points, or 0.21%, to 1,020.75.
The pan-European STOXX 600 index rose 0.07%, while Europe’s broad FTSEurofirst 300 index rose 1.69 points, or 0.07%.
Emerging market stocks rose 3.95 points, or 0.28%, to 1,401.35. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.3%, to 721.69, while Japan’s Nikkei fell 223.47 points, or 0.44%, to 50,526.92.
The dollar steadied and the yen strengthened a bit following the release of the minutes from the Bank of Japan’s policy meeting, but currency traders remained alert to the possibility of a BOJ intervention.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.03% to 98.00, with the euro up 0.09% at $1.1782.
Against the Japanese yen, the dollar weakened 0.22% to 156.19.
In cryptocurrencies, bitcoin gained 0.09% to $87,627.12. Ethereum rose 0.1% to $2,937.98.
U.S. Treasury yields edged lower as investors adjusted their bets for interest rate cuts from the U.S. Federal Reserve in the coming year.
The yield on benchmark U.S. 10-year notes fell 1 basis point to 4.124%, from 4.134% late on Friday.
The 30-year bond yield fell 1.1 basis points to 4.808% from 4.819% late on Friday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.4 basis points to 3.469%, from 3.483% late on Friday.
Oil prices jumped as investors weighed hopes of progress from talks between U.S. and Ukrainian presidents on a possible deal to end the Russia-Ukraine war against potential oil supply disruptions in the Middle East.
U.S. crude rose 2.47% to $58.14 a barrel and Brent rose to $62.01 per barrel, up 2.26% on the day.
Gold and silver prices retreated from record highs amid profit taking. Spot gold fell 4.66% to $4,321.25 an ounce. U.S. gold futures fell 3.31% to $4,379.00 an ounce.
(Reporting by Stephen Culp; Additional reporting by Naomi Rovnick in London and Ankur Banerjee in Singapore)
