Indexes down: Dow 0.38%, S&P 500 0.35%, Nasdaq 0.55%

DigitalBridge rises on SoftBank’s $4 bln acquisition deal

Gold, silver miners fall as precious metal rally stalls

Three main U.S. stock indexes set for double-digit yearly gains

(Updates with late afternoon market data)

By Purvi Agarwal, Shashwat Chauhan and Saeed Azhar

Dec 29 (Reuters) – Wall Street’s main indexes kicked off the final week of the year on a softer note on Monday, as heavyweight technology stocks retreated from last week’s gains that had pushed the S&P 500 to record highs.

The information technology sector weighed on the S&P 500, as most tech and AI-linked stocks declined, with Nvidia down 1.5% and Palantir Technologies shedding 1.6%.

“This is (not) the beginning of the end of the tech dominance, it’ll turn out to be a buying opportunity,” said Hank Smith, director and head of investment strategy at Haverford Trust.

“A big reason for that is the top tech names, excluding Tesla, do not have challenging valuations given their growth rate, the moat around their business

At 1:38 p.m. the Dow Jones Industrial Average fell 187.31 points, or 0.38%, to 48,523.66, the S&P 500 lost 24.32 points, or 0.35%, to 6,905.68 and the Nasdaq Composite lost 130.47 points, or 0.55%, to 23,462.63.

Tesla also fell almost 2.4% after hitting a record high last week and weighed on the consumer discretionary sector .

Materials slipped 1%, with precious metal miners sliding as silver dropped sharply after topping $80 per ounce for the first time, while gold also fell after back-to-back record highs last week.

Conversely, energy stocks gained the most, up 0.9%, tracking a 2% rise in oil prices.

Stocks pulled back after the S&P 500 was in the 1% range of the 7,000-point mark, and the blue-chip Dow hit a record closing high last week.

Some investors were eyeing a “Santa Claus rally”, a seasonal phenomenon where the S&P 500 typically posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.

All three indexes are headed for firm monthly gains, with the Dow and S&P 500 on pace for their eighth consecutive month in the green.

The bull market, which began in October 2022, stayed intact despite concerns over high valuations of technology companies and market volatility, on the back of continued optimism around AI, interest-rate cuts and a resilient economy. All three main indexes are set for their third consecutive yearly gain.

Most strategists are expecting gains in 2026.

With expectations for continued global economic expansion and further easing by the Federal Reserve, it would be unusual to see a significant equity setback or bear market without a recession, said Peter Oppenheimer, chief global equities strategist at Goldman Sachs, in a recent note.

On the macro front, minutes from the Fed’s previous meeting and a weekly reading of jobless claims will be on the radar in an otherwise data-light week.

The S&P 500 has added about 17% so far this year, as the frenzy to capitalize on AI helped the U.S. benchmark overtake Europe’s STOXX 600, despite investors diversifying away from U.S. stocks earlier in the year.

DigitalBridge gained 9.7%, with Japan’s SoftBank Group set to acquire the digital infrastructure investor in a deal valued at $4 billion.

Trading volumes are expected to be light in the holiday-affected week with U.S. markets shut on Thursday for New Year’s Day.

Declining issues outnumbered advancers by a 1.74-to-1 ratio on the NYSE. There were 93 new highs and 63 new lows on the NYSE. The S&P 500 posted 10 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 28 new highs and 213 new lows.

(Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru and Saeed Azhar in New York; Editing by Krishna Chandra Eluri and Daniel Wallis)