US stocks were largely steady on Tuesday following two consecutive declines for the S&P 500, driven by increasing weakness in technology shares.
The benchmark index traded near unchanged levels alongside the Dow Jones Industrial Average, while the Nasdaq Composite edged down about 0.1%.
In the previous session, the S&P 500 slipped 0.35%, the Nasdaq fell 0.5%, and the Dow Jones Industrial Average declined by nearly 250 points.
Tech stocks led the selloff, with concerns about whether companies have overextended themselves on artificial intelligence projects.
Today marks the fourth trading day of the historically bullish “Santa Claus Rally,” but the S&P 500 needs a reality check before it can gain momentum back.
What happened in pre-market trading
Stocks are barely budging as traders trickle back from extended holidays and assess damage.
The S&P 500, Nasdaq, and Dow Jones are all trading nearly flat in early morning action, with futures showing almost no movement.
This comes after Monday’s retreat, when all three major indices closed lower as technology stocks, led by mega-cap names like Nvidia, Meta, and Oracle, faced selling pressure.
Treasury yields are telling a similar story of caution. The 10-year yield slipped to 4.11%, down 2.5 basis points from Monday’s close.
The 30-year-long bond remains around 4.80%. These lower yields suggest investors are rotating into safer government bonds.
This is classic year-end behavior; portfolio managers are rebalancing and reducing risk before the calendar flips to 2026. It’s the financial equivalent of tidying up before the new year.
The real action happened in precious metals overnight. Silver staged an impressive recovery after taking a beating early in the week, surging roughly 7% as traders unwound short positions.
Gold also bounced back, adding to its gains from Monday’s battered performance.
The metals rally suggests some investors are hunting for bargains after the sharp selloffs, or simply repositioning portfolios ahead of 2026.
What to expect today
The day’s biggest event arrives at 2 PM ET when the Federal Reserve releases minutes from its December meeting, the one where the central bank cut rates for the third time in 2025.
Those minutes are crucial because they will reveal behind-the-scenes discussions about the rate policy for 2026.
Markets are pricing in roughly two more cuts next year, but there’s clear division among Fed policymakers about whether that’s the right path.
Beyond that, it’s a light calendar. The market closes early at 1 PM ET tomorrow for New Year’s Eve, so expect trading volume to remain thin today.
That means price swings could be exaggerated on smaller trades.
The tech sector will remain in focus as investors are still grappling with questions about whether companies have bet too heavily on AI and whether those investments will actually pay off.
That uncertainty, more than anything else, will drive where stocks head today.
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