As of publication, the three major indices are all down, with the Dow Jones and S&P 500 Index falling over 1% and the Nasdaq down nearly 2%.

US stock trading has entered the last trading week of the year, with all three major indices close to historical record levels. So far this year, the S&P 500 Index and Dow Jones have risen over 25% and 14% respectively, expected to achieve the largest annual increase since 2021. The Nasdaq has increased over 31% during the same period.

The major indices are also expected to achieve success in the fourth quarter. The Nasdaq Index may set a record for the longest quarterly consecutive gains since 2021.

Market trading is light. Despite no obvious triggering factors, the trading volume of US stocks at year-end is only two-thirds of the daily average.

Kenny Polcari, a strategist at SlateStone Wealth LLC, stated: "This week is another shortened trading week due to the holidays, with lower trading volumes likely and volatility possibly amplified. Avoid making major investment decisions during this time."

The 'Big Seven' of the US Technology Industry has driven the S&P 500 Index to record an increase of nearly 25% this year, while raising concerns that the gains are too concentrated in a few stocks. However, few investors expect the uptrend to end; among the 19 strategists tracked by Bloomberg, no one expects the S&P 500 Index to decline next year.

Investors are looking forward to the stock market continuing to rise at the end of the year and into the New Year, achieving what is known as the 'Santa Claus rally.' The so-called 'Santa Claus rally' phenomenon refers to the market rising during the last five trading days of December and the first two trading days of January. According to LPL Financial data, since 1950, the average ROI of the S&P 500 Index during this period has been 1.3%.

Many investors are increasingly worried that the market may lose momentum by the end of the year. With some investors taking profits at year-end, US stocks fell last Friday, with the Dow dropping over 300 points and the Nasdaq declining about 1.5%.

Tavis McCourt, an Analyst at Raymond James, stated, "I think this should have happened a long time ago. As we move into January, I expect more of these situations to occur. Last month, a small number of individual Stocks surged with tremendous momentum."

However, Nicolas Domont, the fund manager of Optigestion in Paris, stated, "At these moments, it's best to stay put. The US stock market remains a choice for investment. Growth stocks are still performing outstandingly, and earnings forecasts are good, so there is reason to remain optimistic."

This week is also a quiet period for economic data. Wednesday is New Year's Day, and the financial markets will be closed.

US Treasury yields rose, with the 10-year yield falling from its highest level since May.

Quasar Elizundia, a research strategist at broker Pepperstone, stated, "The continued rise in bond yields, driven by a reassessment of expectations for accommodative monetary policy, has triggered some concerns. The Federal Reserve may maintain a tighter monetary policy longer than expected, which could weaken corporate earnings growth expectations for 2025 and thus impact investment decisions."

The Federal Reserve's interest rate setting.the Federal Open Market Committee(FOMC) Next year, four new voting members will rotate in, three of whom are considered hawkish.

In 2025, the new voting members will include Boston Fed President Susan Collins, Chicago Fed President Austan Goolsbee, St. Louis Fed President Alberto Musalem, and Kansas City Fed President Jeffrey Schmid.

According to market data, Goolsbee is seen as the only dove among the four, while Collins and Musalem are considered mildly hawkish, and Schmid is moderately hawkish.

The dollar spot index has fluctuated within a narrow range, rising over 7% this year, primarily driven by expectations of President Trump's "America First" policy.

Tim Waterer, Chief Market Analyst at Kohle Capital Markets Pty, stated: "As we approach the end of the year, there is a sense of unease, partly due to uncertainty in the international trade patterns in 2025. Some traders are avoiding risk before the year ends."

The market is also paying attention to the US debt ceiling issue.

US Treasury Secretary Janet Yellen stated that the Treasury could begin taking extraordinary accounting measures sometime in mid-January to avoid breaching the US debt ceiling, urging lawmakers to take action to uphold the country's "full faith and credit."

Last Friday, Yellen wrote to House Speaker Johnson and other congressional leaders saying, "Starting January 2, 2025, the new debt ceiling will be determined based on the amount of outstanding debt." Yellen indicated that this additional space might be exhausted between January 14 and 23. At that point, the Treasury will resort to accounting measures to help keep government funding adequate.

Focus on individual stocks

Growth Tech experienced a overall decline, with Broadcom falling nearly 4%, Tesla and Meta down over 2%, and Apple and Amazon dropping nearly 2%.

Sectors like Cryptos and Quantum Concepts fell, with MicroStrategy down over 5% and Rigetti Computing plunging over 14%.

Most China Concept Stocks dropped, with Xiaopeng Autos down over 6%, PDD Holdings, JD.com, and Ctrip falling more than 2%.

$Tesla (TSLA.US)$ Falling over 2%, analysts generally expect this year's delivery volume may be slightly lower than last year and debunk rumors of the Cybertruck launching domestically in January.

$Boeing (BA.US)$ Falling over 4%, following the Jeju Airlines crash incident, South Korea's Ministry of Transportation is considering special inspections for Boeing 737-800 aircraft.

$Microsoft (MSFT.US)$ Fell over 1%, as the US Federal Trade Commission launched an antitrust investigation against Microsoft, focusing on Software bundling sales.

$Faraday Future Intelligent Electric Inc. (FFIE.US)$ Increased over 55%, and was once suspended during trading. The company previously announced the completion of a new round of $30 million financing, raising a total of $60 million within three months.

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