Markets Enter Final Trading Week of 2025 Under Geopolitical Strain and Cross-Asset Volatility

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U.S. stocks opened the final trading week of 2025 under pressure on Monday, with major indexes slipping amid thin year-end liquidity and rising geopolitical uncertainty. The Dow Jones Industrial Average fell about 70 points, or roughly 0.1%, in early trading, while the Nasdaq Composite declined roughly 0.3%. The S&P 500 eased about 0.2%, and the Russell 2000 slid approximately 0.3%, signaling a defensive tone as investors stepped back from risk.

Global markets remained cautious as geopolitical developments, sharp commodity moves and subdued trading volumes replaced the customary year-end rally with a more guarded mood across asset classes. With markets closed later this week for the New Year holiday, relatively small flows have had an outsized impact on prices.

Volatility rose notably. The Cboe Volatility Index, or VIX, climbed nearly 10% to just under 15, marking one of its sharpest single-day gains in recent weeks and pointing to increased demand for downside protection.

Geopolitical uncertainty intensified over the weekend following meetings involving President Trump and key foreign leaders. Trump met with Ukrainian President Volodymyr Zelenskiy, who said he pressed the U.S. president for long-term U.S. security guarantees well beyond current proposals.

“I would like the guarantee to be much larger. We would like to consider the possibility of 30, 40, 50 years and then it will be a historic decision by Trump,” Mr. Zelenskiy said.

Trump is also scheduled to meet Israeli Prime Minister Benjamin Netanyahu on Monday at his Mar-a-Lago residence in Florida, keeping Middle East tensions and broader global security risks in focus for investors.

Commodity markets reflected the shifting risk landscape with unusually sharp divergences. Oil prices rose more than 2%, with U.S. crude climbing toward $58 a barrel as traders weighed geopolitical risk premiums against concerns about global demand.

Gold prices fell sharply, dropping nearly 3% in one of their steepest daily declines this quarter, as liquidity pressures and year-end position adjustments outweighed traditional safe-haven demand.

Copper prices posted the most dramatic move of the session. Prices surged as much as 6.6% on the London Metal Exchange—the biggest intraday gain in nearly three years—briefly touching about $13,000 a metric ton before paring gains to roughly 1.6% later in the day.

Cryptocurrency markets also remained under pressure. Bitcoin fell below $88,000, extending a pullback from recent highs as traders reduced exposure amid rising volatility and thin liquidity.

With New Year’s Day approaching and markets set for shortened schedules, investors are bracing for continued choppy trading, closing out 2025 with caution rather than celebration as attention turns toward a potentially volatile start to 2026.