On the opening trading day of 2025, US benchmark equity indexes experienced a downturn, primarily influenced by a significant sell-off in Tesla shares. The technology-heavy Nasdaq Composite and the S&P 500 both declined approximately 0.2%, closing at 19,280.8 and 5,868.6, respectively. Meanwhile, the Dow Jones Industrial Average observed a greater loss of 0.4%, finishing at 42,392.3.
Among various sectors, consumer discretionary stocks exhibited the steepest declines, while energy stocks led the gainers in this tumultuous market environment. The markets had remained closed on Wednesday in observance of New Year's Day, which heightened the day's market movements. In particular, Tesla shares fell sharply by 6.1%, marking it as the worst-performing stock on both the S&P 500 and the Nasdaq, following the electric vehicle manufacturer reporting a year-over-year decrease in vehicle deliveries for the year 2024.
Additionally, the company's fourth-quarter delivery figures did not meet Wall Street targets, further impacting investor sentiment. Boeing, another notable company in the aerospace sector, also faced difficulties; it saw a drop of 2.9%, positioning it as the worst performer on the Dow and among the steepest declines on the S&P 500.
Conversely, Constellation Energy announced a substantial victory, securing a 10-year, $840 million contract aimed at supplying power to over 13 federal government agencies. This development resulted in an impressive 8.4% rise in their shares, making it the standout performer on the Nasdaq and the second-best on the S&P 500. In technology news, Nvidia made headlines for investing $1 billion into artificial intelligence companies last year, as reported by the Financial Times.
This strategic move proved beneficial for Nvidia, as evidenced by a 3% increase in their stock price, making it the top gainer on the Dow. From a bond market perspective, the US 10-year yield decreased by 1.6 basis points, currently sitting at 4.56%, while the two-year yield witnessed a slight decline of one basis point, now at 4.24%. Additionally, manufacturing data for the US showed that the sector continued to remain in contraction territory during December due to reductions in output and new orders.
Sentiment has reached its lowest point since August, according to a survey conducted by S&P Global. Chris Williamson, the Chief Business Economist at S&P Global Market Intelligence, expressed concerns regarding the temporary nature of a recent stabilization in order books amidst uncertainties related to the US presidential election. In terms of labor market data, weekly applications for unemployment insurance in the US unexpectedly fell in the previous week, with continuing claims also seeing a decline.
However, analysts from Jefferies warned that while this drop is optimistic, the significant seasonal volatility during this time of year requires cautious interpretation. The Mortgage Bankers Association reported a sharp decline in mortgage applications over the two weeks ending December 27, attributed to rising rates across all loan types. On the commodities front, West Texas Intermediate crude oil prices rose by 2%, reaching $73.14 per barrel as of Thursday.
Meanwhile, commercial crude stockpiles in the US demonstrated a decrease of 1.2 million barrels, bringing the total to 415.6 million barrels, as reported by the Energy Information Administration. The anticipated draw was set at 2.5 million barrels based on a Bloomberg poll. Gold prices climbed by 1.2% to settle at $2,673.90 per troy ounce, while silver prices saw an increase of 2.6%, reaching $29.99 per ounce.
Overall market movements reflect a complex set of factors influencing both equity and commodity markets as the new year unfolds..