Asian shares follow Wall Street lower in final stretch of 2025

Asian Markets Close Mixed as Year-End Trading Winds Down, Precious Metals Resume Rally

Asian markets showed mixed performance Tuesday while U.S. futures remained flat, as global trading enters its final days of 2024 with characteristically thin volume. With many investors having already closed their positions ahead of the New Year holiday, market movements have been subdued.

The Tokyo Stock Exchange saw the Nikkei index edge marginally lower by less than 0.1% to 50,519.12, while Hong Kong’s Hang Seng bucked the trend with a 0.5% gain to 25,751.64. Mainland China’s Shanghai Composite retreated slightly, losing 0.1% to 3,961.21. Australia’s S&P/ASX 200 dipped 0.1% to 8,719.10, and South Korea’s Kospi remained essentially flat, gaining fewer than two points to close at 4,221.64.

These mixed results followed Monday’s session on Wall Street, where major U.S. indices retreated modestly. The S&P 500 fell 0.3% to 6,905.74, though the benchmark remains up more than 17% for the year and is on track for its eighth consecutive monthly gain. The Dow Jones Industrial Average declined 0.5% to 48,461.93, while the tech-heavy Nasdaq Composite also dropped 0.5% to 23,474.35.

Large technology stocks, particularly those connected to artificial intelligence, were among Monday’s biggest laggards. Industry giant Nvidia fell 1.2% while semiconductor manufacturer Broadcom dropped 0.8%. These declines reflect growing investor skepticism about whether the substantial investments being made in AI technologies will ultimately generate returns commensurate with their lofty valuations.

In contrast to the tech sector’s struggles, energy stocks gained ground on Monday as oil prices climbed. U.S. benchmark crude jumped 2.4% to settle at $58.08 per barrel, while Brent crude, the international standard, rose 2.1% to $61.94. This uplift benefited companies like Exxon Mobil, which gained 1.2%. By early Tuesday trading in Asia, however, crude prices had stabilized, with U.S. crude unchanged and Brent minimally lower at $61.48 per barrel.

The precious metals market has drawn particular attention from investors in recent days. After Monday’s significant pullback—when the Chicago Mercantile Exchange increased margin requirements for precious metals traders—both gold and silver resumed their remarkable 2024 rally on Tuesday. Gold gained 0.9% in early trading after falling 4.6% the previous day, bringing its year-to-date appreciation to approximately 64%. Silver showed even stronger recovery, jumping 5.2% after Monday’s 8.7% slump. Silver prices have more than doubled throughout 2024, reflecting strong investor demand for alternative assets amid economic uncertainties.

The bond market saw modest movement, with the yield on the benchmark 10-year Treasury falling slightly to 4.11% from 4.13% late Friday. Treasury yields have declined substantially since the beginning of the year following the Federal Reserve’s interest rate cuts, which were implemented to support a slowing job market. However, these cuts create a delicate balancing act for policymakers, as they risk reinvigorating inflation that remains persistently above the central bank’s 2% target. While lower interest rates typically stimulate economic growth by reducing borrowing costs, any resulting inflation surge could ultimately undermine these benefits.

In currency markets, the U.S. dollar traded marginally lower at 156.03 Japanese yen compared to 156.05 yen, while the euro strengthened slightly to $1.1779 from $1.1774.

With most global markets set to close for New Year’s Day on Thursday, and some extending closures into Friday, investors are likely to see continued light trading volumes and potentially increased volatility as 2024 draws to a close.