Market Weakness Deepens on Semiconductor and Storage Selloff—Key Fidi Data Points to Softer Trading Activity

The final trading day of the year has brought broad-based pressure to major indices, with the S&P 500 Index sliding -0.33%, the Dow Jones Industrials declining -0.35%, and the Nasdaq 100 falling -0.34%. March futures contracts mirror this weakness, with E-mini S&P 500 futures down -0.35% and E-mini Nasdaq futures dropping -0.38%. All three major benchmarks have retreated to recent lows—the S&P 500 and Dow touching 1-week lows while the Nasdaq 100 has fallen to a 1.5-week low.

Semiconductors and Storage Lead the Decline

The primary drivers of today’s market deterioration are semiconductor manufacturers and data storage companies facing significant headwinds. Micron Technology (MU) has become the leading decliner in the Nasdaq 100, down more than -1%, while chip-focused peers including KLA Corp (KLAC), Western Digital (WDC), Marvell Technology (MRVL), Qualcomm (QCOM), and Broadcom (AVGO) are all trading down more than -1%.

Commodity-linked equities have also suffered, with mining stocks sliding sharply. Gold prices have retreated to a 2.5-week low, while silver has plunged more than -7%. Mining majors Newmont (NEM) and Barrick Mining (B) are both down more than -1%, alongside Freeport-McMoRan (FCX) at -0.69% and Hecla Mining (HL) at -0.46%.

Economic Data Shows Unexpected Strength

Despite the fidi data painting a mixed picture for equities, recent economic releases suggest underlying labor market resilience. US weekly initial unemployment claims unexpectedly fell -16,000 to reach a 1-month low of 199,000, contrary to expectations for an increase to 218,000. This stronger-than-anticipated labor market reading has triggered hawkish repricing in fixed income markets.

The 10-year Treasury yield has climbed +2 basis points to 4.14%, with the yield now at 4.138% as of late-session trading. Higher real rates have weighed on growth-oriented equities, particularly technology and semiconductor stocks that are sensitive to interest rate movements.

China Data Provides Global Growth Support

International economic fidi data from China has offered some relief to risk sentiment. December’s manufacturing PMI rose +0.9 points to 50.1, exceeding expectations of 49.2 and marking the fastest expansion pace in nine months. The non-manufacturing PMI similarly outperformed, rising +0.7 to 50.2 versus forecasts of 49.6. These readings suggest the world’s second-largest economy may be stabilizing.

Individual Stock Movements

Beyond sector-wide trends, several individual equities have diverged sharply from broader indices. Corcept Therapeutics (CORT) has suffered a devastating -51% plunge after FDA rejection of its relacorliant drug for hypertension treatment. In contrast, Vanda Pharmaceuticals (VNDA) surged more than +31% following FDA approval of its Nereus drug for motion-induced nausea prevention.

Terawulf Inc (WULF) advanced more than +5% on an outperform upgrade from Keefe, Bruyette & Woods. Nike (NKE) gained more than +2% to lead Dow gainers on insider buying signals, with CEO Hill purchasing approximately $1 million in shares. Nvidia (NVDA) is up +0.43% after reports that the company has approached TSMC to accelerate production of its H200 AI chips due to stronger demand signals from China.

GlobalFoundries (GFS) has retreated more than -2% following a Wedbush downgrade to neutral from outperform.

Market Conditions and Holiday Impact

Today’s trading activity has been notably subdued, with volume running well below normal levels as markets in Germany and Japan remain closed for New Year’s holiday observances. The shortened trading week ahead will keep investor focus on upcoming US economic data, including December’s S&P manufacturing PMI expected to remain at 51.8 on Friday.

Fed funds futures are pricing in just a 15% probability of a -25 basis point rate cut at the January 27-28 FOMC meeting. International markets are displaying mixed signals, with the Euro Stoxx 50 off -0.08% while China’s Shanghai Composite closed with a modest +0.09% gain.