Dow Jones, S&P 500 and Nasdaq futures are currently pointing to a slightly lower open on Wednesday, with stocks likely to see further downside after ending yesterday’s choppy session modestly lower.
Stocks may extend the pullback seen over the past few sessions, which has seen the major averages close lower for three straight days as traders cash in on recent strength in the markets.
Despite the recent weakness, the major averages are still poised to post substantial gains for the full year.
The tech-heavy Nasdaq is heading into the final trading day of the year up by 21 percent for 2025, while the S&P 500 is up by 17 percent and the Dow is up by 13 percent.
Overall trading activity is likely to remain subdued, however, as some traders look to get a head start on New Year’s Eve celebrations.
Following the weakness seen during Monday’s session, stocks showed a lack of direction over the course of the trading day on Tuesday. The major averages spent the day bouncing back and forth across the unchanged line.
The major averages eventually ended the day modestly lower. The Dow dipped 94.87 points or 0.2 percent to 48,367.06, the Nasdaq slipped 55.27 points or 0.2 percent to 23,419.08 and the S&P 500 edged down 9.50 points or 0.1 percent to 6,896.24.
Traders initially seemed reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve’s latest monetary policy meeting.
However, trading activity remained subdued after the release of the minutes, which reiterated officials’ mixed views about the outlook for interest rates.
The minutes revealed participants expressed a “range of views” about the restrictiveness of the Fed’s current monetary policy stance.
Most participants judged that further rate cuts would likely be appropriate if inflation declined over time as expected, the Fed said.
However, the Fed noted some participants felt it would likely be appropriate to keep rates unchanged for “some time” following the quarter point rate cut at the December meeting.
The Fed’s next monetary policy meeting is scheduled for January 27-28, with CME Group’s FedWatch Tool indicating an 83.9 percent chance the central bank will leave rates unchanged.
The choppy trading on Wall Street also came as some traders remain away from their desks ahead of the New Year’s Day holiday on Thursday.
Reflecting the lackluster performance by the broader markets, most of the major sectors showed only modest moves on the day.
Biotechnology stocks showed a significant move to the downside, however, with the NYSE Arca Biotechnology Index falling by 1.5 percent.
On the other hand, telecom stocks saw notable strength on the day, driving the NYSE Arca North American Telecom Index up by 1.1 percent. Energy and gold stocks also moved higher.