US stocks open in the red: Nasdaq down 0.7%, S&P 500 slips 0.4%

• AI trade leaders including Nvidia, Micron, and Oracle reversed after posting 3-7% gains last week, with investors locking in profits near record levels
• Wall Street strategists project S&P 500 to reach 7,555 by end-2026, implying 9% upside from current levels driven by earnings growth and AI productivity gains
• Fed minutes due Wednesday expected to provide guidance on 2026 rate path as markets enter historically favorable 'Santa Claus rally' period

US stocks opened lower Monday, with the Nasdaq Composite falling 0.7% and the S&P 500 declining 0.4%, while the Dow Jones Industrial Average dipped 0.1% or 43 points. The selloff was driven by profit-taking in large technology stocks, particularly AI-related names that had posted strong gains the previous week—Nvidia rose over 5%, Micron gained 7%, and Oracle advanced 3% last week.

Despite Monday's weakness, 2025 has delivered exceptional returns with the S&P 500 up nearly 18% year-to-date, the Dow gaining 14.5%, and the Nasdaq leading with a 22% increase. The S&P 500 hit an intraday record of 6,945.77 on Friday before closing flat. Markets are now entering the historically favorable "Santa Claus rally" period, which has averaged gains of over 1% since 1950.

Looking ahead to 2026, Wall Street strategists remain bullish with an average S&P 500 year-end target of 7,555, representing approximately 9% upside from current levels. Forecasts range from 7,000 to 8,100, with many clustering around 7,700 (11% potential gain). Goldman Sachs cites solid US economic growth, a weaker dollar, and AI-driven productivity gains as key drivers for earnings expansion.

The Federal Reserve will release minutes from its December meeting on Wednesday at 2 p.m. ET, providing crucial insights into the future path of interest rates heading into 2026. Analysts expect forward price-to-earnings multiples to remain near 22 by year-end, with the seven largest companies continuing to contribute roughly 25% of total S&P 500 earnings.