Stock Market News for Jan 2, 2026

U.S. stocks closed lower on Wednesday as investors took profits ahead of the year-end, with real estate, tech, and industrials stocks dragging the market down. The Nasdaq Composite, the S&P 500, and the Dow all ended in negative territory, despite posting strong gains for 2025 overall. 

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.6%, or 303.77 points, to close at 48,063.29. Twenty-six components of the 30-stock index ended in negative territory, and four ended in positive territory. The major loser of the Dow was International Business Machines Corporation (IBM). The stock price of this integrated solutions provider fell 1.9%. IBM currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The tech-heavy Nasdaq Composite declined 0.8%, to close at 23,241.99.

The S&P 500 lost 0.7%, or 50.74 points, to end at 6,845.50. All 11 broad sectors of the broad-market index ended in negative territory. The Real Estate Select Sector SPDR (XLRE), the Information Technology Select Sector SPDR (XLK) and the Industrials Select Sector SPDR (XLI) fell 1%, 0.9% and 0.9%, respectively.

The fear gauge, the CBOE Volatility Index (VIX), decreased by 0.9% to 14.81. A total of 11.17 billion shares were traded on Wednesday, lower than the last 20-session average of 15.8 billion. The S&P 500 posted three new 52-week highs and one new low, and the Nasdaq Composite recorded 29 new highs and 218 new lows. 

Monthly Roundup

The Dow finished December 2025 up 0.7%, while the S&P 500 rose 0.3% and the Nasdaq fell 0.5%. In the December policy meeting, the Federal Reserve lowered interest rates by 25 basis points for the third time this year, bringing the benchmark rate to roughly 3.6%. Investors anticipate an additional cut in 2026.

Quarterly Roundup

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite rose by 3.5%, 2.4% and 2.6%, respectively, in the fourth quarter of 2025.

Half-Yearly Roundup

The Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500 gained 9%, 14.1% and 10.3%, respectively, in the half-year ended on Dec. 31, 2025.

Yearly Roundup

U.S. stock markets ended 2025 higher despite several ups and downs during the year. The S&P 500 advanced 16.39%, the Nasdaq increased 20.36%, and the Dow rose 12.97%. The year brought high interest in artificial intelligence, while the Federal Reserve made several interest rate reductions. Markets faced the longest government shutdown and trade uncertainties. Gold market value reached its highest point since the last decade, when it increased by 64%, while silver market value rose by 144%, marking decades-high gains. Although markets turned choppy toward the end of the year, all three major indexes finished with solid annual gains.

Economic Data

The Labor Department reported on Wednesday that jobless claims totaled 199,000 for the week ending Dec. 31, decreasing 16,000 from the previous week’s revised level of 215,000. The four-week moving average was 218,750, an increase of 1,750 from the previous week’s revised average of 217,000.

Continuing claims came in at 1,866,000, a decrease of 47,000 from the previous week’s revised level of 1,913,000. The 4-week moving average was 1,873,500, a decrease of 17,750 from the previous week's revised average of 1,891,250.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.9 million barrels for the week ended Dec. 26.