Wall Street Retreats in Year-End Trading Amid Profit-Taking and AI Sector Scrutiny

Market Overview - U.S. equities faced a downturn on December 29, 2025, as investors engaged in profit-taking during a holiday-shortened week, leading to declines in major market indexes, particularly in technology stocks, while the energy sector showed resilience [1] - The S&P 500 was down approximately 0.5% but remains up more than 1% for the year, on track for its eighth consecutive monthly gain [2] - The Dow Jones Industrial Average fell around 249 points, or 0.5%, marking a notable departure from the "Santa Claus rally" seen earlier in December [2] - The Nasdaq Composite declined by about 0.6%, reflecting the pressure on technology shares [2] Sector Performance - Technology shares, a primary driver of market gains throughout 2025, were among the heaviest weights on the market, indicating growing skepticism about the valuation of investments in artificial intelligence [3] - The Energy Sector outperformed other industries, with shares up approximately 1%, driven by a 2.3% increase in U.S. benchmark crude oil prices to US$58.08 per barrel [4] - Major oil companies like Exxon Mobil saw their shares rise by 1.5%, while the Materials Sector was the worst performer, down 1.1% [4] Upcoming Market Events - Investors are awaiting the release of the FOMC Meeting Minutes on December 30, 2025, for insights into the Federal Reserve's monetary policy stance following a recent interest rate cut [5] - U.S. initial jobless claims data will be released on December 31, 2025, and the U.S. manufacturing PMI for December is due on January 2, 2026 [5] - A potential U.S. partial government shutdown looms, with funding set to expire on January 30, 2026, which could introduce trade-related volatility [5] Individual Stock Movements - Nvidia shares pulled back by 1.6% to 1.7% despite a prior rise after licensing AI chip technology from Groq, reflecting profit-taking in the tech sector [9] - Tesla stock was down 2.6%, while Target Corporation shares climbed 3.1% following reports of a significant hedge fund stake [9] - Coupang, Inc. shares surged 6.5% after resolving a cyber issue, while American Airlines Group Inc. experienced a 1.5% decline due to winter storm concerns [9] - Micron Technology was the best-performing stock in the S&P 500, with shares up approximately 2.5% [9] - DigitalBridge Group saw a significant jump of 10% after being acquired by SoftBank for $4 billion [9]