U.S. stocks are slipping in early trading Wednesday as Wall Street closes out a banner year for markets driven by both optimism and uncertainty.
The S&P 500 was down 0.2%. The Dow Jones Industrial Average fell 111 points, or 0.2%, as of 10:07 a.m. Eastern time. The Nasdaq composite fell 0.2%. The stock indexes are coming off a three-day losing streak.
Trading is expected to be light ahead of the New Year’s Day holiday, when markets will be closed. With just one trading day left before the year ends, most big investors have closed out their positions for the year and trading volume has been very thin.
Even after their mini post-Christmas pullback, the indexes are on pace for strong gains for the year.
The S&P 500 is up more than 17% this year, it’s third straight double-digit annual gain. The Nasdaq is up 21.3% and the Dow has gained 13.7%.
Wall Street’s 2025 gains came as investors embraced the optimism surrounding artificial intelligence and its potential for boosting profits across almost all sectors. But the market had no shortage of turbulence along the way amid President Donald Trump’s on-again, off-again tariffs on imported goods worldwide and uncertainty over the trajectory of interest rates.
The S&P 500 plunged nearly 5% on April 3, it’s worst day since the 2020 COVID crash. It fell another 6% a day later, after China’s response raised fears of an escalating trade war. Worries also gripped the U.S. Treasury market.
Trump eventually put his tariffs on pause and negotiated agreements with countries to lower his proposed tariff rates on their imports, helping calm investors’ nerves.
Strong profit reports from companies and three cuts to interest rates by the Federal Reserve also helped drive markets higher.
Still, the AI frenzy that drove markets in 2025 did not come without concerns. Chief among them is the worry that artificial intelligence technology may not produce enough profits and productivity to make all the investment worth it. That could keep the pressure on AI stocks like Nvidia and Broadcom, which were responsible for much of the market’s gains this year.
And it’s not just AI stocks that critics say are too pricey. Stocks across the market still look expensive after their prices climbed faster than profits.
On top of concerns that stocks are overvalued, the ongoing impact of the wide-ranging U.S.-led trade war threatens to add more fuel to inflation in the U.S. Despite the Fed cutting rates over concerns about the labor market, inflation remains solidly above the central bank’s 2% target.
Wall Street is betting that the Fed will hold interest rates steady at its next meeting in January.
Traders got an update on the state of the job market Wednesday. The Labor Department reported that fewer Americans applied for unemployment benefits last week with layoffs remaining low despite a weakening labor market.
Technology and communication services stocks were among the biggest weights of the market Wednesday.
Broadcom fell 1.1% and Micron Technology was 2% lower.
Treasury yields were mostly higher in the bond market. The yield on the 10-year Treasury rose to 4.14% from 4.13% late Tuesday. The yield on the two-year Treasury, which moves more closely with expectations for what the Federal Reserve will do, rose to 3.46% from 3.45%.
Trading in precious metals continued to be volatile as the year winds down. Silver swung back to a big loss, giving back more than 6% early Wednesday after Tuesday's gain of more than 10%. Following Friday's 7.7% jump, silver lost nearly 9% on Monday. It's still up more than 140% this year.
Gold was down 0.6%, but is still up 65% in 2025.
Elsewhere, global stock markets including Germany, Japan and South Korea were closed Wednesday for the New Year's holidays, while trading was mixed in those that remained open.
U.S. crude picked up 39 cents to $58.34 per barrel. Brent crude, the international standard, added 36 cents to $61.69 per barrel.
Hajime Moriyasu, the head coach of Japanese national soccer team, rings the bell during a ceremony to mark the last trading day of the year on the Tokyo Stock Exchange Tuesday, Dec. 30, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)
KYIV, Ukraine (AP) — Russian drones blasted apartment buildings and the power grid in the southern Ukraine city of Odesa in an overnight attack that injured six people, including a toddler and two other children, officials said Wednesday.
Russian President Vladimir Putin expressed confidence in his country's eventual victory in the nearly four-year war against its neighbor.
Four apartment buildings were damaged in the Odesa bombardment, according to regional military administration head Oleh Kiper. The DTEK power provider said two of its energy facilities had significant damage. The company said 10 substations that distribute electricity in the region have been damaged in December.
Russia has escalated attacks on urban areas of Ukraine. As its invasion approaches a four-year milestone in February, it has also intensified targeting of energy infrastructure, seeking to deny Ukrainians heat and running water in the bitter winter months.
Between January and November, more than 2,300 Ukrainian civilians were killed and more than 11,000 were injured, the United Nations said earlier in December. That was 26% higher than in the same period in 2024 and 70% higher than in 2023, it said.
There are renewed diplomatic efforts to stop the fighting.
U.S. President Donald Trump hosted Ukrainian President Volodymyr Zelenskyy on Sunday and announced that a settlement is “closer than ever before." The Ukrainian leader is due to hold talks next week with European leaders supporting his efforts to secure acceptable terms.
Despite progress in peace negotiations, which he didn't mention, Putin reaffirmed his belief in Russia’s eventual success in its invasion during his traditional New Year’s address.
He gave special praise to Russian troops deployed in Ukraine, describing them as heroes “fighting for your native land, truth and justice.”
“We believe in you and our victory,” Putin said, as cited by Russian state news agency Tass.
The Russian Defense Ministry said 86 Ukrainian drones were shot down overnight over Russian regions, the Black Sea and the illegally annexed Crimea peninsula.
Russia’s Defense Ministry released a video of a downed drone that it said was one of 91 Ukrainian drones involved in an alleged attack this week on a Putin residence in northwestern Russia, a claim Kyiv has denied as a “lie.”
The nighttime video showed a man in camouflage, a helmet and a Kevlar vest standing near a damaged drone lying in snow. The man, his face covered, talks about the drone. Neither the man nor the Defense Ministry provided any location or date.
The video and claims could not be independently verified, and there was no immediate comment from Ukrainian officials.
Ukrainian officials have denied the allegations of an attack on Putin’s lakeside country residence and called them a ruse to derail progress in peace negotiations.
Maj. Gen. Alexander Romanenkov of the Russian air force claimed that the drones took off from Ukraine’s Sumy and Chernihiv regions. At a briefing where no questions were allowed, he presented a map showing the drone flight routes before they allegedly were downed by Russian air defenses over the Bryansk, Tver, Smolensk and Novgorod regions.
The European Union’s foreign policy chief, Kaja Kallas, called the Russian allegations “a deliberate distraction” from peace talks.
Zelenskyy said Romania and Croatia are the latest countries to join a fund that buys weapons for Ukraine from the United States.
The financial arrangement, known as the Prioritized Ukraine Requirements List, or PURL, pools contributions from NATO members, except the United States, to purchase U.S. weapons, munitions and equipment.
Since it was established in August, 24 countries are now contributing to the fund, according to Zelenskyy. The fund has received $4.3 billion, with almost $1.5 billion coming in December, he said on social media.
Meanwhile, Ukraine’s Security Service carried out a drone strike on a major Russian fuel storage facility in the northwestern Yaroslavl region early Tuesday, according to a Ukrainian security official who was not authorized to speak publicly.
Long-range drones struck the Temp oil depot in the city of Rybinsk, part of Russia’s state fuel reserve system, the official told The Associated Press. Rybinsk is about 800 kilometers (500 miles) from the Ukrainian border.
A previous version of this story was corrected to give the timing of the alleged attack on Putin's residence as late Sunday and early Monday.
Katie Marie Davies in Leicester, England, contributed to this story.
Follow AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine
In this photo provided by the Ukrainian Emergency Service, emergency services personnel work to extinguish a fire following a Russian attack in Odesa, Ukraine, Wednesday, Dec. 31, 2025. (Ukrainian Emergency Service via AP)
In this image made from video provided by the Russian Defense Ministry Press Service on Tuesday, Dec. 30, 2025, a Russian Army soldier fires from D-30 howitzer towards Ukrainian positions in an undisclosed location in Ukraine. (Russian Defense Ministry Press Service via AP)
