Dow Jones Stock Market Declines as 2024 Ends: What You Need to Know
Dow Jones Stock Market– As 2024 draws to a close, the stock market is showing signs of fatigue. After a strong year of growth for investors, one of the final trading sessions of the year brought a decline, leaving some market participants concerned about the future.
Major Indices Decline in Choppy Trading
On Monday, the stock market faced a downturn, with the major indices experiencing significant losses. The Dow Jones Industrial Average dropped 418.48 points, or 0.97%, closing at 42,573.73. The S&P 500 fell by 1.07% to settle at 5,906.94, and the Nasdaq Composite slid 1.19% to 19,486.78.
Throughout the day, trading was volatile, and the Dow was down more than 700 points at its lowest point. There was no clear catalyst for this decline, and with the market entering the final stretch of 2024, trading was expected to be light due to the shortened holiday week. On that note, the SPDR S&P 500 Trust (SPY) recorded about 47 million shares in total trading volume, which is considered relatively low for a day with a significant market decline.
The Year’s Strong Performance: S&P 500 and Nasdaq Shine
Despite Monday’s losses, the major averages are still on track to close the year with impressive gains. The S&P 500 and Dow Jones are up about 24% and 13%, respectively, poised for the best performance since 2021. The Nasdaq has surged nearly 30% in 2024, and it is on track for its longest quarterly winning streak since 2021.
However, some investors are starting to worry that the market may be losing steam. With year-end profit-taking in full swing, the market seems to be giving back some of its earlier gains, particularly after the major indices posted losses on Friday. Large technology stocks, which have been a driving force for the market this year, struggled again on Monday. Notably, Tesla dropped 3.3%, and Meta Platforms fell by 1.4%. However, Nvidia, the chip giant, bucked the trend, rising by 0.4%, helping to prevent even larger losses in the tech sector.
Jeremy Siegel’s Market Outlook for 2025
Amid these market fluctuations, Jeremy Siegel, a senior economist at WisdomTree and professor emeritus at the Wharton School of Business, shared his perspective on the outlook for 2025. Speaking on CNBC’s “Squawk on the Street”, Siegel expressed concerns that the market may face more challenges in the coming year.
“I really think we’re going to take a pause this next year,” Siegel said. “I think the probability of a correction next year, which is defined as a 10% drop in the S&P, is getting higher.” He went on to suggest that many of the factors that have driven the market’s growth in recent years may already be priced in.
The bond market could also be playing a role in the pullback of technology stocks. Last week, the 10-year Treasury yieldwas trading above 4.6%, though it retreated slightly on Monday. Rising bond yields often pressure tech stocks, as higher interest rates make them less attractive relative to other assets like bonds.
Hope for a Santa Claus Rally
Despite these declines, investors are holding out hope for a Santa Claus rally, a term used to describe a market rebound in the final five trading days of December and the first two days of January. Historically, the S&P 500 has averaged a 1.3% return during this period since 1950, according to LPL Financial.
However, after falling more than 1% in the past two trading sessions, the S&P 500 is now experiencing its worst performance in the last five business days of the year since at least 1952, according to Bespoke Investment Group.
Tom Lee’s Take on Late-Year Market Weakness
Despite the recent market softness, Tom Lee, head of research at Fundstrat, cautioned investors not to worry too much about late-year weakness. In an appearance on CNBC’s “Squawk Box”, Lee explained that the lack of liquidity during the final days of the year could be contributing to the market’s recent volatility.
“It is not a liquid environment because we’re in the final two days of the year,” Lee said. “Strangely, if the last week of December is weak, I actually think it bodes well for a rebound in the first week of January.”
Weak Economic Data and Light Trading Ahead
Looking ahead, the coming days are expected to bring limited economic data, with the market closed on Wednesday for New Year’s Day. On Monday, the Chicago Purchasing Managers Index for December came in at 36.9, missing expectations of 42.2, signaling a potential slowdown in manufacturing activity. While this report disappointed, the market remains focused on the broader picture as 2024 comes to a close.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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