Wall Street closed out 2024 with a mixed performance, seeing stocks sliding in the final trading session of the year. Despite some losses in December, Wall Street had a record-breaking year, with the S&P 500 gaining 23.3% overall. The rally was driven by a strong performance in the technology sector and marked the second consecutive year of 20%+ growth, a feat not seen since 1998. The annual gains were propelled by a thriving economy, robust consumer spending, and a strong job market, with companies like Nvidia and Super Micro Computer leading the market’s momentum.
The Dow Jones Industrial Average and the tech-heavy Nasdaq had slight declines in the final trading day of the year, but still boasted solid annual gains of 12.9% and 28.6% respectively. Corporate earnings played a crucial role in the market’s performance, with S&P 500 companies projected to deliver broad earnings growth of over 9%. Fears of an imminent recession dissipated as the U.S. economy navigated higher interest rates without faltering. Despite the decline on the last trading day, investors remained optimistic about the market’s performance going forward.
Technology stocks weighed on the markets on the final trading day of 2024, with companies like Nvidia, Apple, and AMD seeing declines. However, Energy stocks provided some relief, with Exxon Mobil and Chevron posting gains. Inflation issues, rate cuts, and tariff tensions have been areas of concern for the market. Renewed optimism was found as inflation receded closer to the Federal Reserve’s 2% target, sparking hopes for more interest rate cuts. However, uncertainties loom with the new policies of President-elect Donald Trump, including proposed tariff hikes that could impact inflationary pressures in the coming year.
Analysts are closely watching the market’s performance heading into the new year, with historical data suggesting that the “Santa rally” often sets a tone for January and the rest of the year. Sam Stovall, chief investment strategist at CFRA, noted that the stock market’s record-breaking turn in 2024 exceeded expectations and remains optimistic about the market’s performance. Michael Hartnett, chief investment strategist at BofA Global Research, highlighted that economic optimism is at its highest level since August 2021, indicating possible overheated sentiment.
As the markets pause for the New Year’s Day holiday, investors are looking ahead to updates on U.S. construction spending and manufacturing data. Wall Street will also be closed on January 9 to observe a National Day of Mourning in honor of former President Jimmy Carter, who passed away at age 100. The performance of the market in the early days of 2025 will provide more insights into the trajectory of Wall Street in the coming year.
