new york – Stock indexes ended mostly lower on Tuesday as markets ended lower on the final day of a year that marked another milestone for Wall Street.
The Standard & Poor’s 500 gave up early gains and ended down 0.4%. The benchmark index, which hit 57 all-time highs in 2024, is up 23.3% for the year. It was the second consecutive year of increase of more than 20%. 1998 was the last time the index recorded such large consecutive annual gains.
The Dow Jones Industrial Average fell 0.1%, and the Nasdaq Composite fell 0.9%.
Big tech stocks led this year’s gains, with the Nasdaq index up 28.6% annually. The Dow Jones Industrial Average, which has a much lower weight in tech stocks, rose 12.9% for the year.
Sam Stovall, chief investment strategist at CFRA, said the stock market’s record turnaround in 2024 was “certainly much better than what most people on Wall Street, myself included, expected this year. ” he said.
The strong performance in the US market was driven by economic growth, solid consumer spending, and a strong job market.
Rising prices for companies in the artificial intelligence business such as Nvidia and Super Micro Computer have taken the market to new heights.
Strong corporate earnings growth also contributed. Wall Street expects S&P 500 companies to report broad-based earnings growth of more than 9% annually, according to FactSet. Final numbers will be compiled after the company’s fourth quarter report, which begins in the coming weeks.
In another boost for markets, the Federal Reserve raised key interest rates to 20-year highs in hopes of slowing the economy to beat high inflation, sending Wall Street’s The economy avoided the recession that many feared was inevitable.
Reversing inflation, which is approaching the Fed’s 2% target, is helping to energize Wall Street, with the Fed expected to cut rates several times over the next year, thereby easing borrowing costs and spurring further economic growth. Expectations were high.
Still, after cutting rates three times in 2024, the Fed is taking a more cautious approach heading into 2025 as inflation remains high as President-elect Donald Trump prepares to take the White House. suggests. President Trump has threatened to raise tariffs on imported goods, raising fears that inflation will reignite as businesses pass on the increased costs of tariffs.
This year’s market rally wasn’t just limited to stocks. Bitcoin, which was below $17,000 just two years ago, has surpassed $100,000 for the first time. And gold also shattered records with a 27.4% gain this year.
The S&P 500 index was down about 38% on Tuesday, but losses in tech stocks outweighed gains in the rest of the market.
NVIDIA, a major semiconductor company whose huge valuation has a big impact on the index, fell 2.3%. Apple fell 0.7% and Advanced Micro Devices fell 1.3%.
Rising energy stocks cushioned some of the decline. Exxon Mobil rose 1.7% and Chevron rose 1.2%.
VeriSign rose 0.9% after Warren Buffett’s Berkshire Hathaway announced it was increasing its stake in an Internet domain registry service company.
All told, the S&P 500 index fell 25.31 points to 5,881.63 on Tuesday. The Dow fell 29.51 points to close at 42,544.22, and the Nasdaq fell 175.99 points to close at 19,310.79.
A small post-Christmas market slump does not bode well for the “Santa Claus” rally, a term used to describe the rise in U.S. stock indexes during the last five business days of the year and the first two business days of the new year. Such gains are closely correlated with positive returns in January and next year. However, not being able to participate in the Santa Rally is not necessarily a negative omen.
“Historically, even with a Santa Claus rally, we’ve had an average gain of almost 6% the following year,” Stovall said.
Bond yields were mixed. The yield on the 10-year U.S. Treasury rose to 4.57% from 4.54% late Monday. The yield on two-year bonds was flat at 4.24%.
Oil prices rose 1%.
European stock indexes generally rose. Asian markets had a mixed finish, with exchanges in Tokyo and Seoul closed for the year-end and New Year holidays.
The market will be closed on Wednesday due to New Year’s Day. On Thursday, investors will get the latest snapshot of U.S. construction spending in November. On Friday, Wall Street will receive an update on manufacturing for December.
Meanwhile, the New York Stock Exchange and Nasdaq will close their stock and options markets on January 9 to commemorate former President Carter’s National Day of Remembrance, continuing Wall Street’s long-standing tradition of commemorating national leaders. . The 39th president of the United States and a global humanitarian died Sunday at his home in Plains, Georgia. Passed away at the age of 100.
Veiga writes for The Associated Press.
