The Nasdaq Composite shed 0.8% to end at 23,242 on Wednesday. The S&P 500 lost 0.7% to 6,845.5, and the Dow Jones Industrial Average dropped 0.6% to 48,063.3. All sectors finished lower, led by real estate. The gauges fell for the fourth straight session in slack trading before the New Year's Day holiday.
In 2025, the Nasdaq surged 20%, boosted by spending on artificial intelligence and interest-rate cuts by the Federal Reserve. The S&P rose 16% this year, and the Dow gained 13%.
US markets will be closed on Thursday.
In company news, Nvidia (NVDA) fell 0.6% on Wednesday, erasing earlier gains. The chipmaking giant approached Taiwan Semiconductor Manufacturing (TSM) to meet strong demand for its H200 artificial intelligence chips from Chinese tech companies, Reuters reported. Taiwan Semiconductor rose 1.4%.
Meanwhile, Nvidia is the intended recipient of a 100 billion yuan ($14.3 billion) AI chip order planned by ByteDance for 2026, the South China Morning Post reported.
Axsome Therapeutics (AXSM) shares surged 23% after the company's supplemental new drug application for an Alzheimer's-related therapy was granted priority review by the US Food and Drug Administration.
TransDigm (TDG) shares added 1%. The company agreed to buy Stellant Systems, a supplier of electronic components and subsystems for the aerospace and defense end market, for $960 million.
GlobalFoundries' (GFS) catalysts for stronger revenue and improved margins may take some time to materialize due to recent developments that have contributed to an elongated industry downcycle, Wedbush Securities said. The stock fell 3.3%.
In economic news, weekly applications for unemployment insurance unexpectedly declined into the final part of 2025, while continuing claims fell more than projected, US government data showed.
US Treasury yields were higher, with the 10-year rate last up 4.5 basis points at 4.17% and the two-year rate rising 2.4 basis points to 3.48%.
West Texas Intermediate crude oil was last down 0.9% at $57.41 a barrel. Oil prices were on track to close the year with a sizable annual decline amid oversupply concerns.
Gold futures were last down 1.4% at $4,324.90 per troy ounce, while silver tumbled 9.7% to $70.37 per ounce.
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