Happy New Year! – US Market Wrap

A series of volatile sessions for US stocks continued into 2024’s final day, bringing an ominous end to an otherwise stellar year for North American equity investors.

The S&P 500 and Nasdaq 100 fell for the fourth straight session, part of a year-end pullback that has reduced large-cap market values by more than a trillion dollars. Losses, however, remain a blip in an advance that has boosted the S&P 500 by more than 50% since the beginning of 2023, the best two-year gain since the late 1990s.

While yields remained higher across maturities on Tuesday, a broad Treasury index posted an annual gain, albeit a smaller one than in 2023. The Dollar recorded its best year since 2015.

It was a year when stocks, particularly those of US technology companies, outperformed nearly every other asset class. The S&P 500 gained 23% in 2024, rising for the fifth time in six years, adding $10 trillion to US equity valuations. The MSCI All-Country World Index gained 17%.

Even as the US economy continues to grow, cross-asset investors face a number of challenges in 2025, the first of which is inflation and the Federal Reserve’s response to it – particularly after Chair Jerome Powell signaled that future interest-rate cuts would be limited. Another question is how President-elect Donald Trump’s pro-growth policies will impact consumer prices and the federal budget.

Among individual commodities, gold had the best year since 2010. Oil rose in thin holiday trading, capping a flat performance in 2024 as the market braces for a global surplus next year. Market volatility and supply concerns drove cocoa’s annual gain of 178%.

European gas prices rose to their highest level since November in anticipation of a halt in Russian flows through Ukraine on New Year’s Day.