S&P500 and Nasdaq Index: Year-End Pullback Hits US Stocks Today Despite Strong Year

Wall Street Slips in Final 2025 Session but Locks In Strong Yearly Gains

Wall Street drifted lower on the final trading day of 2025, a fitting end to a quiet, low-liquidity session that offered little fresh direction.

As of 21:00 GMT, the S&P 500 fell 50.74 points, or 0.74%, to 6,845.50. The Nasdaq Composite lost 177.09 points, or 0.76%, to 23,241.99, while the Dow slipped 303.77 points, or 0.63%, to 48,063.29.

Despite the muted close, all three indexes delivered strong double-digit gains for the year, extending their three-year winning streak last seen in 2019–2021.

In my opinion, the late-day selling looked more like routine portfolio housekeeping than anything meaningful. With holiday-thin volumes, traders tend to lock in profits and clean up books, and that seemed to be the case today.

Given the year’s barrage of tariff uncertainty, a lengthy government shutdown, and geopolitical tension, the market’s full-year performance looks even more impressive than the headline numbers suggest.

What Drove the Pullback?

Energy and tech stocks pressured the market, with Microsoft down 0.8% and EQT Corp falling 1.9%. The absence of a Santa Claus rally—historically common in late December—said more about light participation than sentiment. Most traders had already stepped aside after a volatile but rewarding year.

How Central Was AI to 2025?

AI enthusiasm remained the defining story. Nvidia surged 39% year-to-date and became the first company to hit a $5 trillion valuation. Alphabet helped push communication services to the top of the sector leaderboard with a 65% gain, while Micron, Western Digital and Seagate tripled in value. On the other end of the spectrum, FMC Corp and Fiserv suffered steep annual declines of 71.5% and 67%.

From my perspective, the concentration of gains in AI was both remarkable and a bit concerning. The market will need broader participation in 2026 if it hopes to repeat anything close to this year’s strength.

What Else Mattered Today?

Nike added 4% after its CEO disclosed a $1 million share purchase, and Vanda Pharmaceuticals jumped following FDA approval of its motion-sickness treatment. Traders also continued to digest expectations for a more dovish Federal Reserve next year.

Looking Ahead

With volumes thin and the year officially in the books, attention now shifts to early-January economic data and the Fed’s policy tone.

In my view, the key question for 2026 is whether sectors outside technology finally step up—because the next leg of this bull market can’t rest on AI alone.

More Information in our Economic Calendar.