Technology giants pressured U.S. stock indexes at the start of the final trading week of 2025, while precious metals experienced sharp swings as silver pulled back from a historic peak.
Markets Begin Final Week with Caution
Futures for the S&P 500 declined 0.3% and contracts for the Nasdaq 100 fell 0.5% in early trading on Monday, December 29. The retreat was led by major technology companies, with Tesla Inc. and Nvidia Corp. each dropping more than one percent in premarket activity. These moves weighed heavily on the group of stocks known as the Magnificent Seven.
In Europe, the Stoxx 600 index showed little change. This muted activity followed diplomatic discussions concerning a potential peace agreement for Ukraine, which did not produce a breakthrough.
Silver's Wild Ride After Record Break
The precious metals market captured significant attention as silver prices gyrated violently. The metal had earlier smashed through the US$80 per ounce barrier, reaching a new all-time high, before retreating. The rally has been fueled by speculative trading and mounting concerns over a potential supply shortage. Meanwhile, gold prices fell more than one percent.
Industrial metal copper also saw notable action, surging to approach US$13,000 a tonne. The broader metals complex has been a hotspot for months, supported by strong central bank purchases, inflows into exchange-traded funds, and the tailwind of lower borrowing costs, which benefits non-yielding assets like commodities.
Drivers Behind the Metals Movement
Initial momentum for metals on Monday was partly attributed to a weekend comment by Elon Musk. Responding to a post about Chinese export restrictions on the social media platform X, Musk stated, "This is not good. Silver is needed in many industrial processes," highlighting growing bullish sentiment.
Geopolitical tensions have further bolstered the haven appeal of metals. Developments in Venezuela and U.S. military strikes on Islamic State targets in Nigeria have driven investors toward safe assets. Compounding the bullish case, silver inventories are near their lowest levels on record, raising tangible risks of supply shortages that could impact various industries.
In other markets, oil prices rose as the Ukraine peace talks stalled and China pledged support for economic growth in the coming year. Bitcoin briefly topped US$90,000 before paring gains, the U.S. dollar held steady, and Treasury yields edged lower.
Outlook for 2026: Optimism Amid Risks
Despite the cautious start to the week, an optimistic consensus is forming among strategists for the year ahead. After three consecutive years of gains, sell-side analysts are forecasting an average gain of roughly nine percent for the S&P 500 in 2026.
Richard Flax, Chief Investment Officer at Moneyfarm, noted that the question of whether AI represents a bubble will remain central for investors. "The scale of current investment and the pace of innovation mean that even the skeptics cannot ignore its influence on both markets and the real economy," he wrote.
David Kruk, head of trading at La Financiere de l'Echiquier, echoed a positive but measured view. "The broader picture is ideal with the U.S. economy growing strongly, inflation under control, high earnings growth and signals that the cycle of interest rate cuts will continue in 2026," he said. "My take at the moment is that 2026 will look a lot like 2025 so I wouldn't be surprised to see strong buying flows at the beginning of the year."
Investors now look to navigate the final days of 2025, balancing the robust underlying economic signals against persistent risks, including the potential for an AI sector correction and unforeseen policy shocks.
