Wall Street’s main indexes kicked off the final week of the year on a lower note on Monday, as heavyweight technology stocks gave up some ground from last week’s gains which had pushed the S&P 500 to new highs.

The benchmark S&P 500 was in the 1% range of the 7,000-point mark, and the blue-chip Dow hit a record closing high last week. Some investors were hoping for a “Santa Claus rally”, a seasonal phenomenon where the S&P 500 typically posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.

All three indexes are headed for firm monthly gains, with the Dow and S&P 500 on pace for their eighth consecutive month in the green, as technology stocks found footing after an upbeat forecast from chipmaker Micron Technology earlier in the month.

The bull market, which began in October 2022, stayed intact despite concerns over high valuations of technology companies and market volatility, on the back of continued optimism around AI, interest-rate cuts and a resilient economy. All three main indexes are set for their third consecutive yearly gain.

Main Markets Fall

At 09:35 a.m. ET, the Dow Jones Industrial Average fell 66.86 points, or 0.14%, to 48,645.62, the S&P 500 lost 22.08 points, or 0.32%, to 6,907.86 and the Nasdaq Composite lost 142.90 points, or 0.61%, to 23,450.20.

Six of the 11 S&P sectors, however, were trading higher, with energy up 0.7% as crude oil prices rose.

Information technology dropped 0.7%, as most tech and AI-linked stocks fell, with Nvidia down 1.6%.

Tesla also fell 2.2% after hitting a record high last week.

Materials slipped 0.7%, with precious metal miners sliding as silver dropped sharply after topping $80 per ounce for the first time, while gold also fell after back-to-back record highs last week.

On the macro front, minutes from the Fed’s previous meeting and a weekly reading of jobless claims will be on the radar in an otherwise data-light week.

“Given this week’s light economic calendar, internal momentum could be the main market storyline this week. If stocks are going to close out another year of double-digit gains on a high note, they’ll likely need tech to do much of the heavy lifting,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.

The S&P 500 has added about 17% so far this year, as the frenzy to capitalize on artificial intelligence helped the U.S. benchmark overtake Europe’s STOXX 600, despite investors diversifying away from U.S. stocks earlier in the year.

DigitalBridge gained 9.8% after Japan’s SoftBank Group was set to acquire the digital infrastructure investor in deal valued at $4 billion, the companies said.

Trading volumes are expected to be light in the holiday-affected week with U.S. markets shut on Thursday for New Year’s Day.

Declining issues outnumbered advancers by a 1.22-to-1 ratio on the NYSE and by a 1.67-to-1 ratio on the Nasdaq.

The S&P 500 posted six new 52-week highs and no new lows while the Nasdaq Composite recorded 7 new highs and 81 new lows.

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(Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Krishna Chandra Eluri)