Year-End Rally Prospects Sputter As Indexes Falter; Nvidia Slides, Tesla Dives

After rising in action shortened last week by the Christmas Day holiday, the stock market gave back gains Monday as the historical period for a potential Santa Claus rally progressed.

The Dow Jones Industrial Average fell 0.5%, or 250 points, while the benchmark S&P 500 lost 0.4%. The tech-dominated Nasdaq composite suffered a loss of 0.5%.

“(The) bull market continues, but (it’s) far from a stampede,” Freedom Capital Markets Chief Market Strategist Jay Woods said in a note Monday, looking ahead to 2026. “Broadening and growth continue, but they aren’t big enough to lift the market.”

The stock market is poised to “struggle” to achieve a fourth consecutive year of double-digit gains, as Wall Street has only once seen more than three years of back-to-back double-digit growth, in 1995-1999, Woods said.

On Monday, small caps didn’t perform any better than large caps, with the Russell 2000 sliding 0.6% and undercutting its 21-day moving average.

Volume on the New York Stock Exchange and on the Nasdaq was higher compared with the same time on Friday, a day after the Christmas break. Decliners on Monday led advancers by more than 3-to-1 on the NYSE and by more than 2-to-1 on the Nasdaq.

Both the Nasdaq and the S&P 500 picked up a distribution day on Monday. However, it is important to keep in mind that trading volume is typically lighter during the two holiday-shortened trading weeks at the end of each year. Moreover, declines on both the Nasdaq and the S&P 500 have been milder since Dec. 17, when the two indexes fell more than 1%.

Stock Movers

Only four of the 11 sectors on the S&P 500 climbed Monday, led by energy. Sellers dragged down materials, consumer discretionary and technology stocks, among others. Market heavyweight Nvidia (NVDA) slid after two consecutive weekly gains but remained above its 50-day moving average. Meanwhile, fellow Magnificent Seven stock Tesla (TSLA) fell more than 2% to its 21-day moving average.

Tesla was among the three worst performers in the S&P 500 on Monday. Newmont (NEM) lost the most, tumbling more than 5%, followed by Albermarle (ALB), which slumped more than 3%.

On the Dow, financial behemoths Goldman Sachs (GS), American Express (AXP) and JPMorgan Chase (JPM) were the steepest decliners as shares in each fell more than 1%. Interest-rate-sensitive companies will be in focus Tuesday as minutes from the Federal Reserve’s December policy meeting are set to arrive.

Walmart (WMT) and Chevron (CVX) topped blue chips, finishing up 0.7% and 0.6%, respectively.

Dow transports shaved off 0.5%, but utilities gained 0.2%. The S&P MidCap 400 fell 0.6% while the S&P SmallCap 600 lost 0.4%.

Sellers Hit Gold Stocks

Gold and silver stocks fared poorly in Monday’s stock market after nearly a year of outperformance. The gold and silver miners group fell 5.4%, the second-worst performer among Investor’s Business Daily’s 197 industry groups. The metals group fell after the Chicago Mercantile Exchange raised margin requirements for metal contracts on Friday, with the new requirements taking effect on Monday.

But the volatility in metals may continue through early in 2026, considering year-end positioning and rebalancing in two commodities indexes, the Bloomberg Commodity Index and the S&P GSCI – formerly known as the Goldman Sachs Commodity Index – that usually takes place in early January.

Stock Market: Oil Stocks Advance

Oil rose nearly 2% Monday, with West Texas intermediate futures trading near $58 a barrel after peace talks between the U.S. and Ukraine over the Russia-Ukraine war didn’t lead to a resolution. Six oil and gas groups led, ranking among the top 10 industry group performers in the Investor’s Business Daily database on Monday.

Economic data releases will be light in the final week of the year. Pending home sales figures for November, released Monday by the National Association of Realtors, jumped 3.3%, exceeding economists’ consensus of a 0.8% increase. After the Fed minutes, the Labor Department’s weekly jobless claims report is due Wednesday.

The yield on the benchmark 10-year Treasury note fell 2 basis points to 4.11% on Monday.

In tech news, Nvidia (NVDA) completed its $5 billion investment in Intel (INTC), paying $23.38 per Intel share as per a September agreement, well below where Intel traded at on Monday, after the U.S. Federal Trade Commission approved the deal. Intel stock gained while Nvidia fell.

Meanwhile, amid mounting fears about an artificial intelligence bubble, SoftBank (SFTBY) upped its stake in data centers by buying data center play DigitalBridge (DBRG) for $4 billion in cash or $16 per share. SoftBank shares gained 1% while DigitalBridge soared 9%.

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