Stocks moved lower on Monday, potentially putting a sour end to a banner year for investors. The Dow Jones Industrial Average fell 491 points, or 1.1%, and the S&P 500 lost 1.2%. The Nasdaq Composite slid 1.4%, with no apparent news catalyst for the decline and trading expected to be light due to a shortened week.
Despite the pullback, the major averages are still on track for a winning year, with the S&P 500 and Dow up more than 23% and 12%, respectively, and the Nasdaq up more than 29%. The S&P 500 and Dow are also headed for their best year since 2021.
Some market experts are warning that the market may be losing momentum, with year-end profit-taking a possibility. Large tech stocks, such as Tesla and Amazon, were struggling on Monday. However, others, such as Nvidia, managed to stem losses.
Some bond market activity is also being cited as a contributing factor to the pullback, with the 10-year Treasury yield trading above 4.6% last week.
Investors are hoping for a Santa Claus Rally, in which the market rises in the final days of the year and into the first two weeks of January. The S&P 500 has averaged a 1.3% gain during this period since 1950.
However, others are less concerned about late-year weakness, with Fundstrat’s Tom Lee stating that it “it is not a liquid environment because we’re in the final two days of the year,” and that a weak last week of December could actually lead to a rebound in the first week of January.