On December 31, 2024, the U.S. stock market concluded the year with a modest downturn, capping off a year of significant gains. The Nasdaq Composite, known for its heavy weighting in technology stocks, experienced a decline of 0.2%, closing at 19,280.79. Similarly, the S&P 500 slipped 0.2% to end at 5,868.55, while the Dow Jones Industrial Average fell 0.4%, closing at 42,392.27.
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This downturn occurred despite a strong performance throughout 2024, where the S&P 500 gained 23.3% and the Nasdaq surged 28.6%. The final trading day of the year saw early gains that were later reversed, leading to the modest losses by the close. This volatility was partly attributed to a report from the U.S. Department of Labor indicating a surprising decrease in weekly jobless claims, which fell to 211,000 for the week ending December 28, 2024. This unexpected drop suggested a robust labor market, potentially influencing the Federal Reserve's approach to interest rate adjustments in the coming year.
The day's trading was characterized by significant fluctuations, with the major averages swinging back and forth across the unchanged line before settling into negative territory in the early afternoon. This volatility was further exacerbated by below-average trading volumes, as many traders remained away from their desks following the New Year's Day holiday on Wednesday.
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Notably, shares of Tesla Inc. (TSLA) experienced a sharp decline, falling 6.1% after reporting a decrease in annual deliveries for 2024. Similarly, Apple Inc. (AAPL) shares tumbled 2.6% following news that the company is offering discounts on its latest iPhone models in China amid heightened competition.
Despite these setbacks, the broader market's performance over the year remained strong. The S&P 500's 23.3% gain in 2024 marked a significant rebound from previous years, reflecting investor optimism and economic recovery. However, the final day's downturn highlighted the market's sensitivity to economic indicators and corporate performance, underscoring the inherent volatility that can occur even after a year of substantial gains.
Looking ahead, investors are advised to remain vigilant, monitoring economic indicators and corporate earnings reports that could influence market trends in the new year. While the overall outlook for 2025 remains positive, the recent volatility serves as a reminder of the unpredictable nature of the markets and the importance of a diversified investment strategy.
In summary, the U.S. stock market concluded 2024 with a slight decline, capping off a year of significant gains. The Nasdaq Composite, S&P 500, and Dow Jones Industrial Average all experienced modest losses on the final trading day. This downturn was influenced by unexpected economic data and corporate performance, highlighting the market's sensitivity to such factors. Despite the final day's losses, the overall performance in 2024 was strong, reflecting investor optimism and economic recovery. As we move into 2025, it is essential for investors to remain informed and prepared for potential market fluctuations.
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