The main indices closed lower on the New York Stock Exchange on Tuesday, giving an opaque close to a year that broke records in Wall Street.
The S&P 500 gave up an early gain to close down 0.4%. The index, which established 57 all-time highs in 2024, accumulated a gain of 23.3% for the year. This was its second consecutive year with an advance of more than 20%.
The last time the index had such a big consecutive annual gain was in 1998.
The Dow Jones Industrial Average fell 0.1%, and the Nasdaq Composite lost 0.9%.
Big tech broadcasters led this year’s rally, pushing the Nasdaq composite to a 28.6% annual gain. The Dow, which has much less technology weight, is up 12.9% for the year.
The performance of Wall Street in 2024 was “certainly much better than most people in Wall Streetincluding myself, thought we would get it this year,” said Sam Stovall, chief investment strategist at CFRA.
The strong performance of US financial markets this year has been driven by a growing economy, solid consumer spending and a strong labor market.
The high stock prices of companies in the artificial intelligence business, such as Nvidia and Super Micro Computer, helped propel the market to new heights.
Strong corporate profit growth also helped. Wall Street S&P 500 companies are expected to report a more than 9% increase in profits for the year, according to FactSet. Final numbers will be known following fourth quarter reporting that begins in a few weeks.
Another factor that boosted the market was that the economy avoided a recession that many in Wall Street feared was inevitable after the Federal Reserve raised its main interest rate to its highest level in two decades in hopes of slowing the economy in order to combat the high inflation.
The retreat of the inflationwhich has moved closer to the Fed’s 2% target, helped energize Wall Streetraising hopes that the central bank will make several interest rate cuts next year, which would ease borrowing costs and spur more economic growth.
However, after three interest rate cuts in 2024, the Fed has indicated that it will take a more cautious stance heading into 2025, as the inflation remains an issue as the country prepares for President-elect Donald Trump to return to the White House.
Trump’s threats to increase tariffs on imported goods have raised concerns that the inflation could be revived because companies would pass on the higher costs caused by such tariffs to consumers.
The rise in the markets this year was not only in the actions.
Bitcoin, which was below $17,000 just two years ago, surpassed $100,000 for the first time. And gold also broke records and accumulated a gain of more than 26% in the year.
Only about 38% of actions in the S&P 500 fell on Tuesday, but a drop in actions technology detracted from gains in other market sectors.
Semiconductor giant Nvidia, whose huge valuation gives it disproportionate influence on indices, fell 2.3%. Apple fell 0.7%, and Advanced Micro Devices lost 1.3%.
The profits in the actions energy helped moderate some of the declines. Exxon Mobil rose 1.7% and Chevron gained 1.2%.
All things considered, the S&P 500 fell 25.31 points on Tuesday and closed at 5,881.63. The Dow lost 29.51 points to settle at 42,544.22, and the Nasdaq slid 175.99 points to finish at 19,310.79.
Bond yields were mixed. The yield on the 10-year Treasury bond rose from 4.54% to 4.57%. The two-year bond yield remained stable at 4.24%. Crude oil prices rose 1%.
