US stocks declined on Monday, with the Dow decreasing by 418 points, representing nearly 1%, as markets wrap up a record year.
The S&P 500 finished the day with a decline of slightly over 1%, while the Nasdaq, which is heavily weighted towards technology, experienced the largest drop at 1.19%, as investors offloaded major tech stocks like Amazon (AMZN), Alphabet (GOOG), and Tesla (TSLA).
Boeing (BA) stocks experienced significant drops on Monday after the deadly Jeju Air accident, leading South Korea to mandate an inspection of its fleet of 737-800 aircraft, the same Boeing model involved in the crash. Boeing’s shares ended the day with a decline of more than 2% following the news.
Bitcoin’s significant rally at the end of the year also continued to lose momentum on Monday. The cryptocurrency was priced at $94,000 when US stock markets closed for the day at 4 p.m. ET. Bitcoin jumped to $106,000 earlier this month amid expectations that the new administration will adopt more cryptocurrency-friendly policies.
In the commodities sector, natural gas prices surged by 20% on Monday to reach a near two-year peak as energy markets prepare for a cold front that may simultaneously increase demand and restrict supply.
Repositioning at the end of the year
The reduced trading week caused by the New Year celebrations, combined with low volume, can increase market volatility, allowing active buyers and sellers to have a greater effect. Additionally, end-of-year trading activities where traders typically aim to secure profits while frequently selling underperforming investments to balance them out can contribute to a decrease in stock prices.
However, even before the holiday season, the Dow faced its longest consecutive daily decline since 1974. The losses escalated following the Federal Reserve meeting earlier this month. Although the central bank implemented a widely expected quarter-point rate reduction, officials adjusted their forecast for the number of expected rate cuts next year, leading to a significant selloff.
Nonetheless, the Dow, S&P 500, and Nasdaq are poised to record another year of profits.
Among the three, the Nasdaq is poised for the largest yearly gains, rising over 32% as of Monday’s market close.
Next week, the New York Stock Exchange and Nasdaq will close on Thursday, January 9, in observance of a National Day of Mourning for former President Jimmy Carter, who will be honored with a state funeral in Washington, DC, on that day.
