The New York Stock Exchange emerged from a panic selling on Thursday. However, gains were eroded later in the session due to mounting concerns over a potential government shutdown, resulting in a mixed close.
The Dow Jones Industrial Average ended its longest losing streak in 50 years, ending a 10-day slide, but it finished with modest gains.
Both the S&P 500 and Nasdaq finished in negative territory.
The Magnificent Seven tech giants also showed mixed performance.
Tesla stabilized after the previous day’s sharp decline but remained under pressure, while Nvidia halted its five-day losing streak and staged a comeback.
Markets Attempt to Shake Off Panic
The New York stock market initially rallied as it tried to overcome the previous day’s panic selling, but it ultimately finished mixed.
The Dow Jones Industrial Average snapped its 11-day losing streak, closing up a modest 15.37 points (0.04%) at 42,342.24.
However, the S&P 500 slipped 5.08 points (0.09%) to 5,867.08, while the Nasdaq Composite fell 19.92 points (0.10%) to 19,372.77.
The CBOE Volatility Index, often called Wall Street’s fear gauge, plummeted nearly 13%, starkly contrasting to its near 80% surge the previous day. The VIX dropped 3.53 points (12.78%) to 24.09.
Despite this decline, the VIX remained significantly above its baseline of 15 points, indicating persistent market anxiety.
Investor Anxiety Lingers
The major U.S. stock indices started strong but lost steam towards the close, underscoring lingering investor concerns.
A social media post from President-elect Donald Trump after the market closed the previous day sparked renewed anxiety.
Trump strongly opposed the government funding plan negotiated between House Speaker Mike Johnson (Republican, Louisiana) and the Democrats.
Previously, Tesla CEO Elon Musk, who led efforts to cut government spending in Trump’s second term, sharply criticized Johnson’s budget proposal to avoid a shutdown. Trump’s subsequent support of Musk’s stance intensified shutdown fears on December 20.
While experts remain optimistic that a brief shutdown would have minimal impact on the economy and markets if negotiations resume quickly, concerns persist about the possibility of a prolonged shutdown.
Nvidia Breaks Losing Streak
Nvidia managed to rebound from a six-day losing streak.
Although its intraday gains of over 2% were pared to just above 1%, the stock finally broke free from its recent downward trend.
Nvidia closed at $130.68, up $1.77 (1.37%).
However, it remained in correction territory, down over 12% from its all-time high of $148.88 on November 7.
On the other hand, Tesla, which plunged 8.3% the previous day, fluctuated throughout the session before closing slightly lower. It ended down $3.96 (0.90%) at $436.17.
Oil Prices Retreat After Brief Rebound
International oil prices reversed course after a one-day rebound and returned to a downward trend on December 19.
Despite the Federal Reserve’s hawkish stance, global oil prices retreated, giving up gains from a three-day rally.
Growing concerns about significant tariffs under a potential second Trump administration weighed on the market. These tariffs could hamper global trade and economic growth and subsequently impact oil demand.
Brent crude, the international benchmark, settled at $72.88 a barrel for February delivery, down 51 cents (0.69%).
West Texas Intermediate, the US benchmark, fell 67 cents (0.95%) tUS9.91 a barrel for January delivery, breaking below the $70 mark.
