Daily Market Insights - December 31, 2025

Market Overview

The stock market is set for a modestly lower opening as it approaches the final trading session of the year. S&P futures are down by 6 points, while Nasdaq futures are down by 33 points. The major indices finished slightly lower in the previous session, lacking significant catalysts.

Year-to-Date Performance

Despite recent declines, the major averages are on track for solid year-to-date gains:

• Nasdaq Composite: +21.3%
• S&P 500: +17.3%
• DJIA: +13.7%

Corporate News

Key corporate developments include:

• Drugmakers are expected to raise prices on 350 medicines next year.
• Banks anticipate more large M&A deals in 2026.
• NVIDIA is in talks with TSMC to increase production of H200 chips.
• ByteDance plans to invest $14 billion in NVIDIA chips in 2026.
• Tesla's supply deal with a South Korean company has not met expectations.

International Market Update

Asian markets ended the year mixed, with Japan and South Korea closed. Notable performances include:

• Hong Kong's Hang Seng: -0.9% (+27.8% YTD)
• China's Shanghai Composite: +0.1% (+18.4% YTD)
• India's Sensex: +0.6% (+9.1% YTD)

Economic Data

Key economic data released includes:

• China's Manufacturing PMI for December: 50.1 (expected 49.2)
• South Korea's CPI: 0.3% m/m (expected 0.2%)
• Hong Kong's M3 Money Supply: 4.5% yr/yr

Market Sentiment

The market sentiment remains cautious as investors await fresh catalysts heading into the new year. The recent enthusiasm in AI stocks appears to be waning, leading to questions about the sustainability of the "Santa Claus" rally.