The US stock market concluded the holiday week with losses, marking the end of a predominantly successful year. The S&P 500 declined 1.1%, while the tech-focused Nasdaq Composite dropped 1.5% on Friday. The Dow Jones Industrial Average also fell by 0.8%. Concurrently, the 10-year Treasury yield remained near a seven-month high, hovering around 4.6%.
Table Content:
Tech Giants Retreat as Investors Reassess Valuations
Several prominent tech companies experienced declines as investors secured profits, rebalanced portfolios, and reevaluated high valuations. Tesla shares fell by 5%, Nvidia declined 2%, and Amazon decreased by 1%. This profit-taking occurred after significant gains throughout the year.
Market Performance and Outlook for 2025
Despite Friday’s losses, the S&P 500 and Nasdaq each achieved a weekly gain of 1.8%, while the Dow rose 1.5%. With only three trading days left in 2024, the anticipated “Santa Claus” rally has yet to materialize.
Looking ahead to 2025, investors are focused on two key factors: the Federal Reserve’s interest rate policy and the implications of Donald Trump’s return to the presidency. The market has largely absorbed the Fed’s intention to reduce rate cuts next year. Current expectations point to May as the likely timing for the next interest rate reduction, as the Fed continues to address persistent inflation and monitor a cooling labor market.
Regarding Trump’s presidency, while his campaign emphasized significant economic plans, these proposals may face scrutiny from other influential stakeholders.
Key Economic Data and Events for the Coming Week
The final trading days of 2024 are approaching, with only two days remaining for investors to execute trades next week. The economic calendar is relatively light, featuring pending home sales data on Monday and the S&P Case-Shiller Home Price Index on Tuesday. Markets will be closed on New Year’s Day.
January promises to be more active, with the commencement of the next earnings season and President-elect Trump’s inauguration on January 20th. The Federal Reserve’s first interest rate decision of the year is scheduled for January 29th.
In summary, the US stock market closed lower to end a largely positive year, with investors focusing on future economic policies and events.
