GLOBAL MARKETS-US stocks languid, precious metals retreat as markets turn the page on a stellar year

By Stephen Culp

NEW YORK, Dec 31 (Reuters) - Wall Street indexes and their world counterparts showed little conviction amid light trading on the last day of 2025, while investors took some profits in precious metals as they neared the conclusion of a roller-coaster twelve months on Wednesday.

The three major U.S. stock indexes were modestly lower, content to drift along just below record highs and bask in robust, double-digit annual gains.

"It was a rather tiring year looking back on it, and Liberation Day seems like it was eons ago," said Scott Ladner, chief investment officer at Horizon in Charlotte, North Carolina, referring to U.S. President Donald Trump's April 2 sweeping tariff policy announcement. "It's frankly hard to find an asset class that did poorly outside of the U.S. dollar."

Wednesday's modest moves cap a whipsaw year marked by geopolitical turbulence, on-again, off-again tariff threats, dollar weakness, and ongoing mania surrounding the artificial intelligence boom.

"We think the next two years are going to be about the diffusion of AI capabilities throughout the economy," Ladner added. "Understanding that shift from ‘we've got to build this technology’ to ‘we've got to use this technology’ is going to be one of the most important things we can figure out from an investing and an economic analysis standpoint."

Gold and silver continued to consolidate as investors took advantage of the precious metals' remarkable price jumps this year, with gold hitting a 46-year peak and silver seeing a record surge.

Looking to the coming year, investors will seek clues into the U.S. Federal Reserve's path forward on interest rates as the flow of economic data returns to normal in the aftermath of the longest-ever federal government shutdown, with an imminent change of leadership as Jerome Powell nears the end of his stint as Fed Chair.

The Dow Jones Industrial Average .DJI fell 114.33 points, or 0.24%, to 48,252.73, the S&P 500 .SPX fell 16.62 points, or 0.24%, to 6,879.62 and the Nasdaq Composite .IXIC fell 51.05 points, or 0.22%, to 23,368.03.

European shares edged lower but remained just south of all-time highs, capping a year of solid gains, with lower interest rates, Germany's fiscal support and a rotation away from high-priced U.S. tech-related shares.

"When we look back on 2025, international stock markets dominated U.S. equity performance," Ladner said. "(That) is not something we've seen very often and is rather notable."

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 2.46 points, or 0.24%, to 1,017.70.

The pan-European STOXX 600 .STOXX index fell 0.08%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 1.62 points, or 0.07%.

Emerging market stocks .MSCIEF rose 1.71 points, or 0.12%, to 1,404.24. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed higher by 0.02%, at 722.20, while Japan's Nikkei .N225 fell 187.44 points, or 0.37%, to 50,339.48.

TREASURY YIELDS RISE, DOLLAR INCHES HIGHER

U.S. Treasury yields moved higher following a labor market report showing an unexpected dip in applications for unemployment benefits.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 1 basis point to 4.138%, from 4.128% late on Tuesday.

The 30-year bond US30YT=RR yield rose 0.6 basis points to 4.8191% from 4.813% late on Tuesday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.5 basis points to 3.459%, from 3.454% late on Tuesday.

The dollar inched higher but remained on course for a year-on-year decline as the greenback was weighed down by interest rate cuts, fiscal worries and Trump's erratic tariff policies.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.16% to 98.39, with the euro EUR= down 0.12% at $1.1732.

Against the Japanese yen JPY=, the dollar strengthened 0.27% to 156.82.

In cryptocurrencies, bitcoin BTC= fell 0.83% to $87,474.11. Ethereum ETH= rose 0.22% to $2,972.24.

Crude oil prices softened as oversupply concerns offset geopolitical risks. Average annual prices of both Brent and WTI hit their lowest since 2020.

U.S. crude CLc1 fell 0.21% to $57.83 a barrel and Brent LCOc1 fell to $61.23 per barrel, down 0.16% on the day.

Spot gold XAU= fell 0.54% to $4,322.91 an ounce, while spot silver XAG= dropped 6.2% to $71.67 per ounce.