In early morning trading on December 16 (Beijing time), U.S. stocks continued their decline in Monday's late session, with the Nasdaq dropping 120 points. Investors remained focused on the sector rotation from high-growth tech stocks to lower-valued equities while preparing for a series of upcoming U.S. economic data releases.

The Dow Jones Industrial Average fell 88.21 points, or 0.18%, to 48,369.84; the Nasdaq Composite lost 119.18 points, or 0.51%, to 23,075.99; and the S&P 500 declined 12.76 points, or 0.19%, to 6,814.65.

Tech stocks faced pressure, with Salesforce down 3.2%, Amazon dropping 1.4%, Apple falling 1.8%, and Microsoft slipping 1%. As capital continued flowing out of the AI sector, Oracle declined 2.6% and Broadcom plunged 5.4%, extending last week's sharp losses.

Ed Yardeni, president of Yardeni Research, noted: "The 'Magnificent-7' in the S&P 500 may become less magnificent by 2026 as their fierce competition in the AI race begins eroding their monopolistic advantages. The beneficiaries will likely be the remaining 'Impressive 493' stocks in the index."

Upcoming economic reports could set the tone for next week's market. November's nonfarm payrolls data will be released Tuesday alongside October retail sales figures, both delayed due to the autumn government shutdown. November's Consumer Price Index (CPI) follows on Thursday.

In Monday's economic data, the New York Fed reported its Empire State Manufacturing Index fell to -3.90 in December versus estimates of 10. The prices paid index dropped to 37.6 from 49.00, while new orders plunged to 0 from 15.90. Employment indicators showed modest improvement, with the six-month business conditions index rising to 35.7 from 19.10.

New York Fed President John Williams stated current monetary policy is "well positioned" for 2026, following last week's Fed rate cut amid increased employment risks and slightly reduced inflation concerns. "Policy remains sharply focused on balancing these risks," Williams said, noting the FOMC has moved its "slightly restrictive" stance toward neutrality.

Williams projected 2026 economic growth accelerating to about 2.25%, supported by fiscal policy, favorable financial conditions, and AI investments, with inflation potentially dipping below 2.5% next year before reaching the Fed's 2% target by 2027. "After a year of uncertainty, we're entering 2026 with resilience," he concluded, forecasting stable prices and robust growth.