US stocks trade flat as tech weakness persists ahead of key Fed minutes

• S&P 500 and Dow Jones traded near unchanged while Nasdaq edged down 0.1%, following Monday's losses of 0.35%, 0.5%, and 250 points respectively
• 10-year Treasury yield fell to 4.11% as investors rotated into safer bonds amid year-end portfolio rebalancing
• Markets are pricing in two Fed rate cuts for 2026, but December meeting minutes will reveal divisions among policymakers on future policy

US stocks traded flat Tuesday after two consecutive S&P 500 declines, with the benchmark index and Dow Jones Industrial Average near unchanged while the Nasdaq Composite dipped 0.1%. The previous session saw the S&P 500 fall 0.35%, Nasdaq drop 0.5%, and Dow decline nearly 250 points, driven by persistent technology sector weakness amid concerns about AI investment overextension.

Pre-market trading showed minimal movement across major indices, with S&P 500, Nasdaq, and Dow futures nearly flat. Technology giants including Nvidia, Meta, and Oracle continued facing selling pressure. Treasury yields reflected cautious sentiment, with the 10-year yield declining to 4.11% (down 2.5 basis points) and the 30-year remaining around 4.80%, indicating rotation into safer government bonds.

Precious metals staged a notable recovery overnight, with silver surging approximately 7% after early-week losses as traders unwound short positions. Gold also bounced back from Monday's decline, suggesting bargain hunting or year-end portfolio repositioning.

The day's key event is the 2 PM ET release of Federal Reserve minutes from December's meeting, where the central bank implemented its third rate cut of 2025. These minutes will reveal crucial discussions about 2026 rate policy, with markets currently pricing in roughly two additional cuts next year despite policymaker divisions.

Trading volume is expected to remain thin ahead of Wednesday's early 1 PM ET close for New Year's Eve, potentially exaggerating price movements. The technology sector remains under scrutiny as investors question whether companies have overinvested in AI projects and if these investments will deliver returns. This uncertainty continues to be the primary driver of market direction.