NEW YORK, December 31, 2025, 17:32 ET — After-hours
Wall Street’s major indexes ended lower on Wednesday in thin New Year’s Eve trading, but still booked double-digit gains for 2025. The S&P 500 fell 0.74%, the Nasdaq Composite lost 0.76% and the Dow slipped 0.63%. U.S. markets are closed on Thursday for the New Year’s Day holiday.
The late slide matters because year-end flows can exaggerate price moves when liquidity dries up, and many big investors have already locked in gains. Traders will get a clearer read on risk appetite once normal volumes return.
The Labor Department reported weekly jobless claims fell by 16,000 to 199,000 in the latest reading, released a day early because of the holiday. Labor-market data have remained central to expectations for how quickly the Federal Reserve can ease in 2026.
At the closing bell, the S&P 500 lost 50.74 points to end at 6,845.50, while the Nasdaq slid 177.09 points to 23,241.99. The Dow Jones Industrial Average fell 303.77 points to 48,063.29.
Energy and technology were among the biggest drags, with Microsoft down 0.8% and EQT Corp off 1.9%. “It’s perfectly fine in any bull market to have moments of cost,” said Giuseppe Sette, co-founder and president of Reflexivity. Thin liquidity — fewer active buyers and sellers — can amplify intraday swings. Reuters
For the year, the S&P 500 gained 16.39%, the Nasdaq climbed 20.36% and the Dow rose 12.97%, marking a third straight year of gains. The Russell 2000 small-cap index added 11.26%.
The rally was fueled by appetite for artificial-intelligence-linked shares that lifted benchmarks to record highs, even as markets whipsawed on shifting U.S. trade policy. Stocks also rebounded from April’s lows after Trump’s Liberation Day tariffs triggered a bout of global risk aversion.
U.S. stocks also trailed some overseas benchmarks as investors diversified; an Asia-Pacific ex-Japan index rose nearly 27% in 2025. Morgan Stanley Investment Management’s Jitania Kandhari said she expects leadership to broaden in 2026, and pointed to equal-weighted indexes — where each stock counts the same — as a way to capture that shift.
Nvidia, up 39% for 2025, became the first publicly traded company to reach a $5 trillion market capitalization, a measure of a company’s total stock-market value. Communication services was the best-performing S&P 500 sector this year, helped by Alphabet’s 65% jump.
Storage-chip makers including Micron Technology, Western Digital and Seagate more than tripled in value in 2025, outpacing the broader index. FMC Corp and Fiserv were among the biggest laggards, sliding 71.5% and 67% respectively.
The downdraft defied the so-called Santa Claus rally, a seasonal tendency for stocks to rise in the last five trading days of December and the first two of January, according to Stock Trader’s Almanac data cited by Reuters. The Dow logged its eighth straight monthly gain, while the S&P 500 slipped into a monthly loss for December.
Trading volumes stayed light in the holiday-shortened week, with 11.17 billion shares changing hands versus a 20-day average of 15.8 billion. Decliners outnumbered advancers by 3.22-to-1 on the NYSE, a sign of broad-based selling into year-end.
Nike rose 4% after CEO Elliott Hill disclosed he recently bought about $1 million worth of shares. Vanda Pharmaceuticals jumped after the U.S. Food and Drug Administration approved its drug to prevent motion-induced vomiting.
Markets reopen on Friday, Jan. 2, with investors watching for signs that normal liquidity brings steadier price action. The next key readouts on the U.S. calendar include weekly jobless claims on Jan. 2, ISM manufacturing on Jan. 5 and the monthly employment report on Jan. 9, followed by consumer price data on Jan. 13.
With many desks returning after the holiday, traders will watch whether the S&P 500 can defend the 6,800 area — a round-number marker — as positioning shifts into the first full week of 2026.
