The three major stock indexes on Wall Street ended lower for a third straight day, one day before the last trading day of the year. With no clear market catalyst, investors appeared to favor profit-taking and position squaring over a year-end rally.
On the 30th (U.S. Eastern time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished down 94.87 points, or 0.20%, at 48,367.06. The Standard & Poor's (S&P) 500 fell 9.50 points, or 0.14%, to 6,896.24, and the Nasdaq composite lost 55.27 points, or 0.24%, to close at 23,419.08.
In the absence of fresh catalysts to move the market, investors extended a selling bias. After five straight sessions of gains, indexes appeared to be catching their breath ahead of year-end.
As a result, the so-called "Santa rally" is effectively failing to appear this year-end and early new year. The Santa rally refers to the tendency for U.S. stocks to rise over the last five trading days of a year and the first two trading days of a new year, with the S&P 500's average gain over that period known to be 1.3%. This year, however, the market has fallen for three straight days with one day left before the final trading day.
The fact that major indexes have risen for three consecutive years through this year is also weighing on sentiment. Rather than banking on a year-end rally, some are prioritizing profit-taking and position cleanup, tempering expectations ahead of the new year.
Barry Bannister, chief equity strategist at Stifel, said, "Investors may be overly optimistic heading into next year," and noted, "Our expected trend for next year is sideways, and it may not be easy for the market to extend gains for a fourth straight year."
Minutes from the December Federal Open Market Committee (FOMC) meeting released that day showed differences among members over the pace of interest rate cuts. The minutes said some participants proposed that after cutting rates at this meeting, it would be appropriate to hold the target rate steady for a time. Most supported rate cuts, but the text also included that some preferred a hold.
By sector, none moved more than 1%. Energy, communication services, utilities, real estate and materials rose.
Among mega-cap tech stocks with a market capitalization of $1 trillion or more, only Tesla fell, down 1.13%, while the others were largely flat. Applied Materials' plan to spin off its cloud division and merge it with Ekso Bionics sent Ekso Bionics shares surging 94%.
Silver-focused miner First Majestic Silver rose 1.38%. As silver prices rebounded 7% that day, silver miners that had weakened the previous day also recovered.
According to the Chicago Mercantile Exchange (CME) FedWatch tool, after the FOMC minutes were released, federal funds futures priced an 85.1% probability of a January hold. That was up from 83.4% near the prior close.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.13 point, or 0.92%, to 14.33 from the previous session.