U.S. stock indexes closed mostly lower on Tuesday, wrapping up a record-breaking year for Wall Street with a subdued finish. The S&P 500, after an early gain, dipped 0.4% to 5,881.63. Despite this, the index marked a stellar 23.3% gain for the year, including 57 record highs, making it the second consecutive year with a rise exceeding 20%—a feat last achieved in 1998.
The Dow Jones Industrial Average edged down 0.1% to 42,544.22, while the tech-heavy Nasdaq Composite slipped 0.9% to 19,310.79, though it recorded an impressive 28.6% annual gain, fueled by the dominance of Big Tech stocks.
2024: A Year of Economic Strength and Market Resilience
The robust performance of U.S. markets was driven by a strong economy, healthy consumer spending, and a resilient jobs market. Companies tied to artificial intelligence, such as Nvidia and Super Micro Computer, played a pivotal role in propelling the market to new heights.
Corporate earnings growth exceeded expectations, with analysts forecasting a 9% rise in S&P 500 earnings for the year, according to FactSet. Additionally, inflation showed signs of easing, inching closer to the Federal Reserve’s 2% target, which bolstered hopes for further interest rate cuts in 2025.
Challenges and Concerns Ahead
Despite three rate cuts in 2024, the Federal Reserve signaled caution for 2025, as inflation remains sticky and looming tariff threats from President-elect Donald Trump add to economic uncertainties.
While Tuesday’s losses in technology stocks, including Nvidia (-2.3%) and Apple (-0.7%), weighed heavily on the market, gains in energy stocks like Exxon Mobil (+1.7%) and Chevron (+1.2%) helped offset some declines.
Beyond Stocks: Bitcoin and Gold Shine
Bitcoin soared past $100,000 for the first time, and gold delivered a 27.4% annual return, reflecting strong performances across alternative assets.
Looking Ahead
Markets will remain closed Wednesday for New Year’s Day and observe a National Day of Mourning on Jan. 9 to honor former President Jimmy Carter, who passed away at 100. Investors will turn their attention to upcoming reports on construction spending and manufacturing in the first week of 2025, as Wall Street gauges the potential for sustained economic growth in the new year.
