U.S. stocks edged lower on Tuesday amid thin holiday trading, as renewed weakness in technology shares weighed on the broader market. Declines in major financial stocks added pressure to the Dow Jones Industrial Average, while the S&P 500 and Nasdaq slipped modestly.
Technology stocks fell about 0.2% for a second straight session. Shares of Nvidia dropped 0.6%, while Apple lost 0.4%. The sector’s pullback followed last week’s rally, when gains in large-cap tech stocks pushed the S&P 500 to a record high.
By contrast, Meta Platforms climbed 1.4%, lifting the communication services sector by 0.4%. The Instagram parent said it would acquire artificial intelligence startup Manus, reinforcing investor interest in AI-related growth.
Market activity remained subdued during the holiday-shortened week, with U.S. markets closed on Thursday for New Year’s Day. Analysts cautioned against reading too much into short-term moves driven by light volumes.
Art Hogan, chief market strategist at B Riley Wealth, said year-end repositioning can create temporary volatility and that trading during holiday weeks often lacks strong signals.
Losses in Goldman Sachs and American Express weighed on the Dow.
By mid-morning trading, the Dow Jones Industrial Average was down 85 points, or 0.18%, while the S&P 500 slipped 0.10% and the Nasdaq Composite declined 0.15%.
Despite the day’s losses, all three major indexes remained on pace for strong monthly gains in December. The S&P 500 and the Dow are tracking their eighth consecutive monthly advance, marking their longest winning streak since 2017.
The S&P 500 recently hovered within 1% of the 7,000-point milestone, with some investors watching for a potential “Santa Claus rally.” According to the Stock Trader’s Almanac, this seasonal pattern typically delivers gains during the final five trading days of the year and the first two sessions of January.
Attention is now turning to minutes from the Federal Reserve’s December meeting, when policymakers delivered a widely expected 25-basis-point rate cut and signaled caution on further easing until there is more clarity on labor market conditions.
Since that meeting, softer economic data and expectations of a more dovish Fed leadership have fueled optimism that additional interest rate cuts could arrive in 2026.
The S&P 500 has gained roughly 17% so far this year, driven largely by enthusiasm around artificial intelligence. The index has outperformed Europe’s STOXX 600, even as some investors diversified away from U.S. equities earlier in the year amid trade tensions and central bank uncertainty.
Geopolitical risks also remain in focus. Russia said it would harden its negotiating position after accusing Ukraine of targeting a Russian presidential residence, despite recent comments from U.S. President Donald Trump suggesting progress in peace talks.
Diminishing hopes for a peace deal supported oil prices, allowing the S&P 500 energy sector to outperform with a 0.7% gain.
Shares of T1 Energy rose 1% after the company announced the completion of a $160 million sale of Section 45X production tax credits to an investment-grade buyer.
Market breadth was positive, with advancing stocks outnumbering decliners on both the NYSE and the Nasdaq. The S&P 500 recorded three new 52-week highs and one new low, while the Nasdaq Composite posted 21 new highs and 121 new lows.
