ASX set to open flat after stocks slip on Wall Street as 2025 winds down
The Australian share market is set for a flat start on the second and final day of the year after shares fell overnight on Wall Street as investors unloaded bets on tech giants before the end of the year and volatility hit precious metals.
ASX futures were up 5 points, or less than 0.1 per cent, at 8721 by 07:25 AEDT. While the S&P 500 fell 0.4 percent in afternoon trading in New York, Tesla, Nvidia and Meta Platform shares were also among the losers. The US stock benchmark is still up around 18 percent for the year. The Dow Jones Industrial Average fell 0.4 percent. The Nasdaq composite fell 0.6 percent.
New York started the week cautiously as we entered the new year.Credit: Bloomberg
“The weakness in stocks is a reversal from last week, when tech stocks were on the rise,” said Joe Mazzola, chief trading and derivatives strategist at Charles Schwab. But “it does not appear to be linked to any underlying factors.”
The Australian dollar was down 0.3 per cent at 66.93¢ as of 7:39am AEDT. Markets will face another short week in late 2025. Wall Street will be closed on Thursday for New Year’s Day, while the ASX will end New Year’s Eve early and be closed for New Year’s Day.
Metal stocks fell overnight, sparking volatility in the local market, as gold and silver took profits following a strong year-end rally that sent both metals to record highs as weak market liquidity exacerbated price swings.
Spot gold fell as much as 5 percent, marking its biggest intraday drop since Oct. 21, but precious metal prices are still up around 64 percent for the year. Silver fell 11 percent, its biggest intraday decline since September 2020, but has more than doubled overall in 2025. Both metals have pulled back sharply from their all-time highs, triggering signals that the rally to records is happening too fast, too quickly.
“Don’t look for big moves,” said Michael Haigh, head of FIC and Commodity Research at Société Générale, adding that the end of each year tends to be “very illiquid.”
Major technology stocks with extreme valuations were among the heaviest weights in the U.S. market. Nvidia fell 1.3 percent and Tesla fell 2.7 percent. Investors’ optimism about the future of AI has driven the sector mostly higher throughout the year, setting a series of records in the broader market.
However, towards the end of the year, technology stocks follow a more unstable course. They mostly declined in November and recorded only modest increases through December. Nvidia and several other companies that focus on artificial intelligence or make heavy use of emerging technology have become among the world’s most valuable companies. Investors seem more skeptical about whether the ultimate return will make big investments worthwhile.
