US markets closed lower on the penultimate trading day of a year in which the benchmark indices have notched up strong gains.

The Dow Jones Industrial Average declined 1.0 percent to 42,573.73, the S&P 500 lost 1.1 percent to 5,906.94, and the Nasdaq Composite Index plunged 1.2 percent to 19,486.79.

But Sam Stovall of CFRA stressed that there was no major catalyst behind the shift, and the lead-up to New Year's Day was typically a low-volume period.

Looking ahead, he expected that investors would be closely eyeing data that could give the US Federal Reserve reason to hold back on rate cuts, such as consumer inflation readings.

While markets have already reacted to President-elect Donald Trump's victory at the polls, investors are also monitoring further details of his trade policy -- after his threats of sweeping new tariffs on imports.

Some major tech stocks slumped Monday, with Tesla shares dropping 3.3 percent and Facebook parent Meta losing 1.4 percent. (AFP)