Major Indexes Edge Lower to Start December
US stocks pulled back on Monday as volatility resurfaced at the start of the new trading month. The S&P 500 and Nasdaq Composite each dipped by 0.1%, while the Dow Jones Industrial Average fell 231 points, or 0.5%. The broader market mirrored weakness seen across several risk-sensitive assets, adding caution to what is typically a historically strong month for equities.
Names tied to the artificial intelligence theme saw renewed profit-taking. Broadcom and Super Micro Computer lost more than 2% each, reversing part of last week’s strong gains. Meanwhile, Synopsys rose sharply after Nvidia disclosed an investment in the company. Nvidia shares gained more than 1%.
Markets Pause After a Strong Week
The declines follow an impressive stretch for US equities. Last week, the Dow and S&P 500 rallied more than 3%, while the Nasdaq climbed nearly 5%. Still, November was far from stable. The Nasdaq ended the month with a 1.5% decline, snapping a seven-month winning streak, and at one point had fallen nearly 8% from its October close amid renewed concern over stretched valuations in key technology names.
The S&P 500 and Dow managed to finish the month slightly above flat, though trading remained choppy as investors grappled with shifting expectations for earnings, rates and sector leadership.
Seasonal Trends Offer Support
Despite the cautious start to December, historical patterns remain supportive. The S&P 500 has averaged a gain of more than 1% in December dating back to 1950, according to the Stock Trader’s Almanac, making it one of the strongest months of the year for the benchmark index.
“Stocks are going through a period of digestion,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management. “But we think the backdrop for stocks remains strong right now, especially given the high likelihood that the Federal Reserve will cut interest rates again next week.”
Fed Decision in Focus
Investor attention is now turning to next week’s Federal Reserve meeting. Market pricing reflects strong expectations for another rate cut, which could help ease financial conditions and support equity valuations heading into year-end. Until then, analysts expect continued pockets of volatility as investors balance sector rotation, valuation resets and macroeconomic uncertainty.
