US equity markets closed modestly lower on Tuesday as investors digested the Federal Reserve’s December meeting minutes, which indicated policymakers are inclined to keep interest rates unchanged for some time. Trading remained subdued amid year-end positioning and limited risk appetite.
The Dow Jones Industrial Average slipped around 0.2%, while the S&P 500 edged down 0.1%, extending its losing streak to three sessions. The Nasdaq Composite also declined roughly 0.2%. Small-cap stocks underperformed, with the Russell 2000 falling close to 0.7%.
Fed Minutes: Rates Likely to Stay Steady
Minutes from the Federal Open Market Committee’s December 9–10 meeting suggested that, following the most recent quarter-point rate cut, officials see merit in holding rates steady for an extended period. While inflation forecasts for 2025 and 2026 were revised slightly lower, policymakers acknowledged that tariffs have recently pushed core inflation higher, though those effects are expected to ease over time.
Sector and Stock Highlights
Technology stocks showed mild weakness. Nvidia slipped about 0.4%, Palantir Technologies declined nearly 2%, and Tesla fell more than 1%. Exchange-traded funds tracking major indexes also posted marginal losses.
Biotechnology stocks weighed on the broader market. AnaptysBio and Rhythm Pharmaceuticals both dropped over 5%, making them among the worst performers in the IBD 50 index after recent rallies.
On the upside, Boeing gained around 2% after securing a multi-billion-dollar defense contract, while several China-linked stocks, including Baidu, Nio, and XPeng, advanced amid renewed buying interest.
Bonds, Commodities, and Crypto
The 10-year US Treasury yield inched up to approximately 4.13%. Oil prices declined to near $58 per barrel, while Bitcoin rose above $87,000, outperforming traditional risk assets.
Market Outlook
With the final trading days of 2025 approaching, investors remain cautious as expectations for near-term rate cuts diminish. Futures markets currently assign a relatively low probability to a rate cut at the Federal Reserve’s January meeting, reinforcing the market’s wait-and-watch stance.
