Traders work on the trading floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Stock futures edged lower ahead of the final trading day of 2024, following another prosperous year on Wall Street. S&P 500 Index It rose more than 20% for the second consecutive year, driven by enthusiasm for interest rate cuts, economic strength and artificial intelligence.
Futures and Dow Jones Industrial Average fell 40 points, while S&P 500 Index Futures It fell slightly by 0.2%. Nasdaq 100 Futures It fell nearly 0.3%.
The S&P has soared more than 23.8% and is expected to rise more than 20% for the second consecutive year. this Dow Jones Industrial Average increased by nearly 13%, while Nasdaq Index Outperformed the market, rising 29.8%.
Stories surrounding artificial intelligence and its potential productivity gains have driven major stock indexes sharply higher throughout the year, pushing “Big Seven” stocks such as AI chip darling Nvidia and iPhone giant Apple to new highs. Gains in large-cap technology stocks also lifted major averages to record levels.
Stocks also benefited as the Federal Reserve began cutting interest rates after one of the most aggressive rate hike cycles in recent history, fueling hopes for a period of economic growth as borrowing costs fell. The central bank has cut interest rates by 100 basis points since September. While further rate cuts are expected in the new year, the Fed’s pace may be slower than initially expected.
President-elect Donald Trump’s successful re-election campaign in November has also been a boon for markets, spurring hopes of loosening regulations, lowering corporate tax rates and focusing on a resilient U.S. economy. Expectations of a crypto-friendly government pushed Bitcoin to a record above $108,000. Tesla emerged as another big election winner due to CEO Musk’s close relationship with Trump.
The Nasdaq and S&P rose 7.1% and 2.5% respectively this quarter, posting their fifth consecutive quarterly gains for the first time since 2021.
Despite a strong year-to-date performance, Wall Street is heading into the final day of the year on a weak note as the market has lost some steam in recent sessions. December has been a weak period for stocks as investors took profits on some of 2024’s biggest winners and as worries about rising interest rates at the end of the year intensified. The Dow Jones fell 5.2%, its worst month since September 2022.
“If you think about it, it makes sense,” Paul Hickey, co-founder of Bespoke Investment Group, said Monday on CNBC’s “The Closing Bell: Overtime.” “Going into the end of the year, the market was up a lot and there was a new administration. , so uncertainty is going to be there.”
The loss of momentum also dashed investor hopes for a Santa Claus rally, which occurs when markets rise in each of the last five trading days of the calendar year and the first two trading days of January. In contrast, the S&P 500 has fallen at least 1% in each of the past two sessions.
The Dow Jones Index closed in a volatile manner on Monday, falling more than 418 points, or 0.97%. The S&P fell 1.07% and the Nasdaq fell 1.19%.
The market will be closed on New Year’s Day on Wednesday.
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