U. S. stocks plunged in the latest 2024 trading call, but weakness in the final days of the year did little to dent the market’s big annual gain.
Investors in 2024 enjoyed a second consecutive year of gains over 20% for the benchmark S&P 500 amid soaring excitement for artificial intelligence, interest rate cuts, and Donald Trump’s return to the White House.
The benchmark index is up more than 23% for the year, just a 29% gain from the Nasdaq Composite. The Dow Jones Industrial Average rose only about 13%.
The AI frenzy continued to reward chipmakers and software firms with ties to the space, ballooning the market capitalization of the Magnificent Seven. The year saw Nvidia soar past a $3 trillion market cap to briefly overtake Apple as the most valuable company in the world.
Though the tech rally deepened fears of an over-concentrated market, the bull run broadened out in 2024. Utilities, which power AI, have benefited heavily.
In the second half of 2024, inflation gains and unexpected labor market strength gave the Federal Reserve room to begin easing policy, amplifying risk appetite. Recession fears, which persisted into 2023, have completely dissipated.
Stocks will rise sharply heading into November as Trump’s election fueled enthusiasm for deregulation and tax cuts.
But the recovery was not limited to stock markets.
2024 is a landmark year for Bitcoin as the token surpassed the six-figure mark for the first time. Commodities from gold to cocoa have hit records of their own.
Having reaped such gains without even one correction in the past two years, investors are now facing a wall of uncertainty.
Indices wobbled in the final sessions of 2024 as investors fretted about the outlook for interest rates and became nervous about the sustainability of the hot rise.
While no primary analysts expect the uptrend to end, some investors deserve to prepare for corrections and weaker growth.
The stock and bond market will be closed on Wednesday for New Year’s Day.
For this week’s economic data, investors will be watching the first jobless claims on Thursday, followed by ISM production data on Friday.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Tuesday:
Here’s what else happened:
In commodities, bonds and cryptocurrencies:
Bitcoin slipped 0.8% to $93,416.