US market today: Wall Street trades flat in thin year-end session; investors eye Fed outlook as 2025 draws to a close
US stocks were largely steady in light trading on the final day of 2025, as investors wrapped up a year marked by strong gains driven by optimism around artificial intelligence, alongside lingering concerns over inflation and valuations, AP reported.Early in Wednesday’s session, the S&P 500 was flat, while the Dow Jones Industrial Average slipped 47 points, or 0.1%. The Nasdaq composite was little changed. Trading volumes were muted ahead of the New Year’s Day holiday, when US markets will remain closed.The S&P 500 is up more than 17% so far in 2025, buoyed by enthusiasm around artificial intelligence and its potential to lift corporate profits. Treasury yields edged higher in the bond market.Futures trading earlier in the day had pointed to a cautious open, with S&P 500 and Dow futures down 0.1% and Nasdaq futures lower by 0.2%, as most institutional investors remained on the sidelines.While artificial intelligence stocks powered much of the market’s advance this year, the rally has also attracted scepticism. Investors remain concerned about whether AI investments will deliver sufficient profits and productivity gains to justify current valuations.Stocks linked to the AI boom, including Nvidia and Broadcom, accounted for a large share of the gains in 2025, but worries persist that prices across the broader market have risen faster than underlying earnings.Adding to the caution are concerns that a US-led trade war could stoke inflationary pressures. Although the Federal Reserve cut its benchmark interest rate three times toward the end of the year, inflation continues to remain above the central bank’s 2% target.The Fed has cited signs of a weakening labour market as a reason for easing policy, with investors awaiting fresh data on weekly jobless claims later on Wednesday as an indicator of layoffs.Minutes from the Fed’s December meeting underscored divisions among policymakers, and markets are currently betting that the central bank will hold rates steady at its January meeting, AP reported.Sung Won Sohn, professor of finance and economics at Loyola Marymount University, said uncertainty continues to build across global markets.“Central banks must tread carefully, and financial markets will likely experience continued volatility as expectations shift,” he said, AP quoted.Commodity markets remained volatile as the year wound down. Silver swung sharply lower, giving back more than 8% early Wednesday after rising over 10% a day earlier, though it remains up more than 140% for the year. Gold fell 1.5% but is still higher by 66% in 2025.US crude oil rose 31 cents to $58.26 a barrel, while Brent crude gained 28 cents to $61.61. Despite the uptick, crude prices are down about 19% for the year, with US petrol prices lower by around 6% to 7% nationally.Global equity markets were mixed. Germany, Japan and South Korea were closed for New Year holidays. France’s CAC 40 fell 0.5% by midday, while Britain’s FTSE 100 slipped 0.2%.In Asia, Hong Kong’s Hang Seng declined 0.9%, the Shanghai Composite edged up 0.1%, Taiwan’s Taiex rose 0.9%, and Australia’s S&P/ASX 200 dipped marginally.
