Tech Megacaps Trigger Stock Plunge as Precious Metals Correction Accelerates

The major U.S. stock indexes are facing notable headwinds today. The S&P 500 is trading down 0.24%, while the Nasdaq 100 has also declined 0.24%. The Dow Jones Industrials are holding up slightly better, down just 0.09%. Futures markets reflect similar weakness, with March E-mini S&P 500 contracts down 0.28% and March E-mini Nasdaq futures sliding 0.27%.

The Technology Sector Leads the Stock Plunge

The day’s sell-off is being driven primarily by weakness in megacap technology names. The “Magnificent Seven” are mostly underwater, with Nvidia (NVDA) and Tesla (TSLA) showing the heaviest losses at more than 1% each. Meta Platforms (META) dropped 0.83%, while Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Apple (AAPL) are all in red territory, posting declines ranging from 0.07% to 0.37%.

Metals Market Reversal Pressures Mining Stocks

Adding to market pressure is a sharp reversal in precious metals following recent record-breaking rallies. Silver and platinum have plunged more than 8% and 4% respectively as profit-taking swept through the sector. The CME’s decision to raise margin requirements for precious metals trading has intensified liquidation pressures. Mining stocks are getting hammered as a result—Newmont (NEM) leads the losers with a drop exceeding 6%, followed by Hecla Mining (HL) down more than 5%, Coeur Mining (CDE) off more than 4%, and Freeport-McMoRan (FCX) down more than 2%.

Energy Sector Provides Counterbalance

Energy has emerged as today’s strongest sector, offering some offset to broader market weakness. Crude oil prices have surged more than 2%, buoyed by failed peace negotiations over the weekend regarding the Ukraine-Russian conflict, along with ongoing geopolitical tensions in Venezuela and Nigeria. China’s government also signaled expanded fiscal spending, which supported crude demand. Devon Energy (DVN) is climbing more than 2%, while Diamondback Energy (FANG) leads the Nasdaq 100 gainers with an advance exceeding 1%. Chevron (CVX), Exxon Mobil (XOM), Valero Energy (VLO), and Occidental Petroleum (OXY) are all posting gains above 1%.

Mixed Economic Signals and Bond Market Support

On the economic front, November pending home sales beat expectations, rising 3.3% month-over-month versus a forecast of 0.9%. However, the Dallas Fed’s December manufacturing outlook unexpectedly deteriorated to -10.9 from expectations of -6.0, providing a headwind. The 10-year Treasury yield has retreated to a one-week low of 4.10%, reflecting safe-haven demand amid equity weakness and geopolitical concerns. March 10-year T-note futures are up 2 ticks, with the yield down 0.8 basis points to 4.12%. European government bonds are also rallying, with German 10-year bund yields falling to a three-week low of 2.826% and U.K. 10-year gilt yields sliding to a one-week low of 4.488%.

Notable Movers and Earnings

Outside the major themes, Praxis Precision Medicine (PRAX) soared more than 14% following FDA breakthrough therapy designation for its ulixacaltamide treatment. DigitalBridge Group (DBRG) jumped more than 9% on news of SoftBank Group’s $4 billion acquisition. Coupang (CPNG) gained more than 1% after committing to over $1 billion in customer compensation for a data breach. Verisk Analytics (VRSK) advanced more than 1% after terminating its AccuLynx acquisition agreement. There are no earnings reports scheduled for December 29.

Week Ahead: FOMC Minutes and Economic Data

This shortened holiday week will keep focus on economic releases and Fed communications. The December Chicago PMI, FOMC meeting minutes, initial jobless claims, and the December S&P manufacturing PMI will all be on the calendar. Markets are currently pricing in just a 19% probability of a quarter-point rate cut at the FOMC’s January 27-28 meeting. Overseas, China’s Shanghai Composite reached a six-week high with a ninth consecutive daily gain (+0.04%), while Japan’s Nikkei fell 0.44% and Europe’s Euro Stoxx 50 rose 0.14%.