Market Recap: S&P 500, Nasdaq, and Dow Sink in Final Trading Week of 2024
As we approach the end of 2024, the stock market is experiencing a downturn in its final trading days. Despite a strong year overall, investors are facing headwinds as they look towards 2025. This recap will cover the current market performance, upcoming events, and major stock news that are shaping the financial landscape.
Current Market Performance
As of Monday, December 30, 2024, major U.S. stock indexes are showing significant declines:
– The S&P 500 (^GSPC) fell by 1.5%, with nearly every stock in the index losing ground.
– The Dow Jones Industrial Average (^DJI) dropped 624 points, or 1.5%.
– The Nasdaq Composite (^IXIC) experienced the largest decline, falling 1.7%.
Despite this end-of-year slump, it’s important to note that 2024 has been a strong year for the markets overall. The S&P 500 is still on track for its second consecutive year of gains exceeding 20% .
Factors Influencing Market Movements
Several factors are contributing to the current market volatility:
1. Federal Reserve Concerns: Investors are worried that the Federal Reserve may not cut interest rates as much as hoped in 2025. Inflation remains above the central bank’s 2% target, with the latest report showing it edged up to 2.7% in November .
2. U.S. Debt Ceiling: Treasury Secretary Janet Yellen warned that the government will hit its borrowing limit next month, potentially triggering “extraordinary measures” to prevent a U.S. default .
3. Tech Sector Weakness: Big Tech companies are among the heaviest weights on the market. Apple (AAPL) and Microsoft (MSFT) both fell by more than 1.6%, impacting the broader market due to their large valuations .
4. Boeing Crisis: Boeing (BA) stock fell 3.2% following a fatal crash of one of its 737-800 aircraft in South Korea. This incident has led to inspections of all 737-800 planes in the country and has affected airline stocks as well .
Upcoming Market Events
Investors should keep an eye on these upcoming economic reports and events:
1. Housing Market Data: Monthly home sales and house price data are expected to be released this week .
2. Construction Spending: An updated snapshot of U.S. construction spending for November will be available on Thursday .
3. Labor Market Update: The Labor Department will report initial unemployment claims for the week ended December 28 on Thursday .
4. Manufacturing Data: An update on manufacturing for December will be released on Friday .
5. New Year’s Holiday: Markets will be closed on Wednesday, January 1, 2025, for the New Year’s holiday .
Major Stock News
1. Boeing (BA): The company faces another setback with the recent crash in South Korea. Boeing’s stock has declined more than 30% this year amid various challenges .
2. Airlines: United Airlines (UAL), Delta Air Lines (DAL), and American Airlines (AAL) all saw declines following the Boeing incident .
3. Energy Sector: While most sectors are down, energy stocks are holding up better than the rest of the market. Natural gas prices jumped 9.7%, benefiting producers like EQT Corp .
4. Cryptocurrency: Bitcoin’s late-year rally has fizzled, with the cryptocurrency trading at $92,000, down from its recent high of $106,000 .
Looking Ahead
Despite the current downturn, Wall Street expects companies within the S&P 500 to report broad earnings growth of more than 9% for the year . However, concerns about inflation, potential tariffs from the incoming administration, and the Federal Reserve’s cautious approach to interest rates may keep markets on edge as we enter 2025.
As we close out 2024, investors should remain vigilant and prepared for potential volatility in the early days of the new year. The interplay between economic data, corporate earnings, and policy decisions will likely shape market trends in the coming months.
