Wall Street opens 2025 with modest losses

Street Losses
Street Losses

The U.S. stock market opened 2025 with modest losses on Thursday, extending the downturn that dimmed the close of 2024. The S&P 500 fell 0.2%, marking its longest losing streak since April. The Dow Jones Industrial Average dropped 151 points, or 0.4%, after an early gain of 360 points disappeared.

The Nasdaq composite lost 0.2%.

Tesla played a role in dragging the market lower after reporting lower-than-expected vehicle deliveries in the last three months of 2024. The company’s stock slumped 6.1%.

Tesla had been one of the big winners of 2024, especially after Donald Trump’s Election Day victory raised speculation that Elon Musk’s close relationship with the president-elect could benefit the company. However, critics have warned that stock prices across the market have risen too high, too quickly, and are at risk of a pullback. On the positive side, companies tied to the energy industry benefited from rising prices for crude oil and natural gas.

Constellation Energy jumped 8.4% for one of the biggest gains in the S&P 500 after announcing it won more than $1 billion in combined contracts with the U.S. General Services Administration to supply power and perform energy savings and conservation measures. Some Big Tech stocks also helped limit the market’s losses.

Wall Street starts 2025 with uncertainty

Nvidia, whose chips are driving advancements in artificial-intelligence technology, rose 3% following its nearly 240% surge in 2023 and better-than-170% jump last year. Some investors and analysts are counting on the AI rush to continue, despite critics arguing it has made stock prices too expensive. As the new year begins, investors have adjusted expectations for interest rate cuts from the Federal Reserve in 2025.

Inflation remains stubbornly above the Fed’s 2% target, and President Trump’s push for tariffs and other policies has raised concerns about upward pressure on consumer prices. This has led the Fed to announce it will likely deliver fewer interest rate cuts in 2025 than previously thought, dampening some market optimism. Despite high interest rates instituted by the Fed in recent years to combat inflation, the economy has held up remarkably well.

Many investors expect the Fed to keep its main interest rate steady later this month, which would be the first meeting in four where it hasn’t eased rates. In stock markets abroad, indexes fell 2.2% in Hong Kong and 2.7% in Shanghai after a survey of factory managers showed Chinese activity expanding at a slower pace in December. New orders, employment, and business sentiment weakened.

Upbeat talk by Chinese leader Xi Jinping in a New Year’s address did little to raise optimism among investors hoping for more aggressive action to support the world’s second-largest economy and boost stock prices. Stock indexes were mostly higher in Europe, while Japan’s market remained closed.

Adria Woodman

More Stories