Stock Market Today: Major Indexes Slip as Investors Eye Year-End Rally
Market Performance: S&P 500, Dow, and Nasdaq Retreat
On Thursday, December 26, 2024, the U.S. stock market experienced a slight downturn as investors returned from the Christmas break. The S&P 500 fell 0.25% to 6,024.82, while the Dow Jones Industrial Average dropped 0.20% to 43,209.53. The tech-heavy Nasdaq Composite declined 0.34% to 19,962.92. This pullback comes after a strong performance earlier in the week, with the S&P 500 and Nasdaq wrapping up Tuesday’s shortened session with a third consecutive day of gains.
Why is the Market Down Today?
The market’s retreat can be attributed to several factors:
1. Profit-taking: Investors are taking stock of their portfolios as the year comes to a close.
2. Rising yields: Increasing bond yields are putting pressure on some stocks.
3. Light trading volumes: Holiday-thinned trading is contributing to market volatility.
4. Anticipation of economic data: Traders are awaiting the Labor Department’s weekly jobless claims report.
Despite the day’s losses, the market has shown remarkable strength in 2024. The S&P 500 has posted a total return of 28.4% year-to-date, largely driven by the performance of the “Magnificent Seven” stocks.
Major Stock News: Tech Giants and AI Leaders
Several key stocks are making headlines today:
1. Nvidia (NVDA): The chipmaker dropped 0.86% to $139.01. Notably, retail traders have poured nearly $30 billion into Nvidia shares in 2024, making it the most-traded stock of the year.
2. Tesla (TSLA): The electric vehicle manufacturer saw its stock price decline 1.21% to $456.68.
3. Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Meta Platforms (META): These tech giants, along with Nvidia, have accounted for more than half of the S&P 500’s total return this year.
4. AppLovin (APP): The mobile technology company has been the biggest individual gainer of 2024, with its market cap surging from $13 billion to over $110 billion, driven by its focus on AI-powered online advertising.
5. MicroStrategy (MSTR): The business intelligence company, known for its significant bitcoin holdings, has seen its shares jump 467% this year. However, it fell 3.57% today to $345.37.
Upcoming Market Events: What to Watch
Investors should keep an eye on these upcoming events that could impact the market:
1. Weekly Jobless Claims Report: Due before market open on Thursday, this data could provide insights into the job market’s health.
2. Santa Claus Rally: Traders are hoping for a strong finish to the year, a phenomenon known as the “Santa Claus Rally.” Historically, the S&P 500 has gained an average of 1.3% in the last five trading days of December and the first two days of January.
3. Federal Reserve Lawsuit: Major banks and business groups have sued the Federal Reserve, alleging that the central bank’s annual “stress tests” of Wall Street firms violate the law. The outcome of this legal challenge could have significant implications for the financial sector.
Market Outlook: Balancing Optimism and Caution
As we approach the end of 2024, the market faces both opportunities and challenges. The strong performance of AI-related stocks and the cryptocurrency sector has been a major driver of gains. However, investors are also contending with the Federal Reserve’s projection of fewer interest rate cuts in 2025.
The “Returnuary” phenomenon, where returns are expected to rise to 17% of all merchandise sales in 2024, reaching $890 billion worth of returned goods, could also impact retail stocks in the coming weeks.
In conclusion, while the market is experiencing a slight pullback today, the overall trend for 2024 has been strongly positive. Investors should remain vigilant, keeping an eye on upcoming economic data and potential year-end rally opportunities while being mindful of the challenges that lie ahead in 2025.
