MARKET SNAPSHOT

Declines in consumer discretionary and technology sectors dragged major U.S. stock indexes lower. Treasury yields fell and silver and gold prices reached new record highs. Oil prices settled higher and then slid after-hours after comments from President Trump indicated a de-escalation between Washington and Tehran. The U.S. dollar weakened.

MARKET WRAPS

EQUITIES

Tech stocks retreated, with declines in Nvidia and other chip companies dragging the Nasdaq composite to its worst day in almost a month.

Driving the moves: concerns about high valuations and additional regulation. On Tuesday, the Trump administration said Nvidia must meet new security requirements before sending H200 artificial-intelligence chips to China. Meanwhile, Florida Gov. Ron DeSantis reiterated plans for consumer protection rules on artificial intelligence.

Broadcom and Arm Holdings lost 4.2% and 2.6% respectively. Nvidia fell 1.4%, and the Nasdaq dropped 1% to notch its worst one-day drop since December 17. Tech firms' ambitious plans for blowout spending on artificial intelligence infrastructure had already been making some investors skittish over the past couple of months.

"I would argue that tech stocks are no longer a safe haven," said Jay Hatfield, chief executive officer at Infrastructure Capital Advisors. "They've been a safe haven since the pandemic but that's not normal."

The S&P 500 and Dow Jones Industrial Average both fell less than the Nasdaq, losing 0.5% and less than 0.1% respectively, in another example of the so-called rotation trade that has powered recent market moves. Investors' growing sense of optimism about the economy, and their more-cautious view of the artificial-intelligence build-out, have spurred a shift away from some of the recent tech high-fliers and into stocks poised to benefit from a re-acceleration in growth.

Earlier Wednesday, the Japanese Nikkei 225 surged again--up 1.5%--extending Monday's record high as investors anticipated Prime Minister Sanae Takaichi would call a February election.

China's benchmark Shanghai Composite declined 0.3%, the Shenzhen Composite added 0.7% and the tech-heavy ChiNext rose 0.8%. Hong Kong's Hang Seng index climbed 0.6%.

Stocks in Australia rose, as the S&P/ASX 200 Benchmark Index added 0.1%.

New Zealand's S&P/NZX 50 gained 0.7%.

COMMODITIES

Oil prices settled higher and then slid after-hours after comments from President Trump indicated a de-escalation between Washington and Tehran.

President Trump said he had information that killings of protesters in Iran are stopping, and that there were no plans for executions. The comments were seen as a de-escalation of tensions that have pushed oil prices to their highest level in three months on the possibility of U.S. strikes against Iran.

Prior to their decline after-hours, WTI settled up 1.4% at $62.02 a barrel, and Brent gained 1.6% to $66.52.

Gold and silver both settled at new record highs.

Front month Comex gold for January delivery gained 0.8% to settle at $4,626.30 per troy ounce.

Front month Comex silver for January delivery gained 5.81% to $90.87 per troy ounce.

TODAY'S TOP HEADLINES

Philly Fed President Paulson Hints at More Interest-Rate Cuts in 2026

Philadelphia Federal Reserve President Anna Paulson signaled Wednesday that interest rates could move lower later this year if inflation continues to ease and the labor market stabilizes, even as economic growth remains solid.

Paulson said the current level of the federal-funds rate remains "a little restrictive" and suggested that further easing would be appropriate, while speaking at the Chamber of Commerce for Greater Philadelphia's State of the Economy event. Paulson is a voting member of the Federal Open Market Committee this year and is considered among the more dovish of the regional Fed presidents with votes in 2026.

"If all of that happens, then some modest further adjustments to the funds rate would likely be appropriate later in the year," Paulson said, referring to a scenario in which inflation moderates and labor market conditions don't deteriorate further.

Fed's Kashkari Says Economy's Strength Complicates Case for Rate Cuts

Minneapolis Federal Reserve President Neel Kashkari says the U.S. economy has remained stronger than expected under higher interest rates-a resilience that complicates the Federal Reserve's decisions on when and how much to cut interest rates this year.

Speaking during a virtual town hall hosted by the Wisconsin Bankers Association, Kashkari said Wednesday that inflation is moving lower but remains well above the Fed's 2% target, while the labor market has cooled without showing signs of significant stress.

"The economy has been more resilient than I thought it would be," Kashkari said, pointing to steady consumer spending and heavy investment tied to artificial intelligence, including data centers and energy infrastructure. "That makes me wonder how tight monetary policy really is."

Fed's Miran Scolds Central Bankers Who Defended Powell

A Federal Reserve governor appointed by President Trump criticized top global central bankers who defended Fed Chair Jerome Powell amid the Justice Department's criminal probe.

In a Q&A session with a moderator at an economics conference in Athens, Greece, on Wednesday, Fed governor Stephen Miran said that a letter in Powell's support signed by prominent central-bank officials from around the world was an overstep.

"I don't think it's appropriate for central bankers to get involved in non-monetary-policy issues in their own country, and I think it's even less appropriate in other countries," Miran said.

Businesses across the U.S. are beginning to pass tariff costs to consumers, Fed's 'beige book' finds

Inflation pressures were rising across the U.S. as 2025 ended, according to the Federal Reserve's periodic view of the economy known as the "beige book."

"Cost pressures due to tariffs were a consistent theme across all districts" the report said Wednesday.

Several businesses that initially absorbed tariff-related costs were beginning to pass them on to customers as pretariff inventories became depleted or as price pressures grew more acute, the report noted.

Retail Sales Brightened in November

Sales growth for U.S. retailers picked up in November, evidence that the consumer economy didn't lose steam in the home stretch of last year.

Retail sales grew by 0.6% in November to $735.9 billion, an improvement from a slight pullback by shoppers in October, the Commerce Department said Wednesday. Analysts polled by The Wall Street Journal were expecting a 0.4% November increase.

In some ways, the economy now looks more fragile than during the post-pandemic economic boom, with more slack in the labor market and heightened uncertainty over changes in federal trade and immigration policy. Yet personal spending, which makes up more than two-thirds of the overall economy, hasn't missed a beat.

Home Sales in December Jump 5.1%, Biggest Gain in Nearly 2 Years

Home sales finished 2025 with surprisingly strong momentum, rising 5.1% in December for the biggest gain in nearly two years. But even with last month's boost, the year as a whole still ranks as one of the worst sales slumps in decades.

The increase in sales, which was more than double what economists surveyed by The Wall Street Journal had expected, reflected easing mortgage rates and slower growth in home prices.

On a monthly basis, the existing-home sales gain was the biggest since February 2024 and the fourth-straight monthly increase, the National Association of Realtors said Wednesday. The four consecutive months of rising sales is the longest streak since 2020.

Meta Lays Off 1,500 People in Metaverse Division

Meta Platforms has laid off roughly 10% of staff, about 1,500 people, from its Reality Labs division, the unit that houses its virtual and augmented reality efforts, according to a person familiar with the matter.

In December, The Wall Street Journal reported that Meta was planning to make budget cuts to the teams working on what it calls the metaverse, an area that Meta Chief Executive Mark Zuckerberg once called the future of the company, and shift some spending over to development of AI glasses.

"We said last month that we were shifting some of our investment from Metaverse toward Wearables," a Meta spokesman said. "This is part of that effort."

Trump Orders New Tariffs on Some Semiconductors, Critical Minerals

President Donald Trump on Wednesday signed two executive orders to impose tariffs on some semiconductors and critical minerals, according to the White House pool report. The tariffs were ordered under a national-security provision of trade law referred to as Section 232.

The move comes as investors are awaiting a Supreme Court decision on the legality of Trump's tariffs using the International Emergency Economic Powers Act. Sectoral tariffs such as those imposed under Section 232 likely wouldn't be affected by a ruling.

The administration already has sectoral tariffs on aluminum, auto parts and analysts have been expecting levies on semiconductors and critical minerals as the probes into these sectors were started in April.

Banks Say U.S. Consumers Remain Resilient Despite Economic Pressures

American consumers continued to spend and borrow at a healthy clip at the end of 2025, despite a year marked by uncertainty around job security, tariffs and stubborn inflation.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo this week collectively reported $28.5 billion in profits for the fourth quarter. That amounted to $123.2 billion for the full year, up nearly 5% from 2024.

"All of the metrics that we can see tell us the consumer remains resilient and in great shape," Bank of America Chief Financial Officer Alastair Borthwick said on a call with reporters.