US stocks ease from record highs, world indexes set for double-digit 2025 gains
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NEW YORK, Dec 29 : U.S. stocks dipped on Monday and gold tumbled from record highs at the top of a holiday-shortened week.
The three major U.S. stock indexes were weighed down by a broad selloff which was slightly mitigated by strength in some defensive sectors which have underperformed for much of the year.
Treasury yields eased and the dollar inched above its lowest level in almost three months, reflecting shifting expectations of Federal Reserve interest rate cuts in the coming year year.
"In light volume trading, we’re seeing a reversal of what we saw over the last couple of days," says Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. "The broader market is looking at the strength of last week and selling off as we head into year-end. "
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Market participants were closely monitoring negotiations between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy, with Trump saying they were getting "a lot closer" to a deal that could end Russia's war on Ukraine. But hopes for a deal dimmed after Russia accused Ukraine of trying to attack President Vladimir Putin's residence, in a potential roadblock to further negotiations.
With just three sessions remaining, U.S. and global stocks were on course to end 2025 near record highs, having notched double-digit gains in a tumultuous year dominated by tariff wars, central bank policy and simmering geopolitical tensions.
"When we started the year, we saw tariffs get implemented and the question was ‘will the market survive?’ The answer was yes," Haworth added. "The global economy has managed to weather many of the storms and uncertainties this year because consumers were spending and business continued to invest."
"The more we can broaden out, that gives this rally more room to run," Haworth said. "We’ve had three years of strong gains there’s reason for us to expect a fourth."
The Dow Jones Industrial Average fell 186.15 points, or 0.38 per cent, to 48,524.82, the S&P 500 fell 22.50 points, or 0.32 per cent, to 6,907.44 and the Nasdaq Composite fell 125.12 points, or 0.53 per cent, to 23,467.98.
European stocks hit new all-time highs as gains in technology and consumer-focused stocks, although gains were capped by weakness in defense shares.
MSCI's gauge of stocks across the globe fell 2.03 points, or 0.20 per cent, to 1,020,77.
The pan-European STOXX 600 index rose 0.09 per cent, while Europe's broad FTSEurofirst 300 index rose 1.93 points, or 0.08 per cent
Emerging market stocks rose 3.97 points, or 0.28 per cent, to 1,401.37. MSCI's broadest index of Asia-Pacific shares outside Japan closed higher by 0.3 per cent, to 721.73, while Japan's Nikkei fell 223.47 points, or 0.44 per cent, to 50,526.92.
The dollar steadied and the yen strengthened following the release of the minutes from the Bank of Japan's policy meeting, but currency traders remained alert to the possibility of a BOJ intervention.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.04 per cent to 98.07, with the euro down 0.07 per cent at $1.1763.
Against the Japanese yen, the dollar weakened 0.27 per cent to 156.11.
In cryptocurrencies, bitcoin fell 0.26 per cent to $87,316.01. Ethereum declined 0.14 per cent to $2,930.81.
U.S. Treasury yields edged lower as investors adjusted their bets for interest rate cuts from the U.S. Federal Reserve in the coming year as economic data releases slowly return to their post-shutdown normal.
The yield on benchmark U.S. 10-year notes fell 1.8 basis points to 4.116 per cent, from 4.134 per cent late on Friday.
The 30-year bond yield fell 1.4 basis points to 4.805 per cent from 4.819 per cent late on Friday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.8 basis points to 3.465 per cent, from 3.483 per cent late on Friday.
Oil prices jumped as talks between U.S. and Ukrainian presidents on a possible deal to end the Russia-Ukraine war was complicated by Russia's accusations, and against potential oil supply disruptions in the Middle East arising from growing tensions in Yemen.
U.S. crude rose 2.36 per cent to settle at $58.14 per barrel, while Brent settled at $61.94 per barrel, up 214 per cent on the day.
Gold tumbled from record highs along with other precious metals amid profit taking. Spot gold fell 4.43 per cent to $4,331.44 an ounce. U.S. gold futures fell 3.31 per cent to $4,379.00 an ounce.
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