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Stocks closed lower on Tuesday as investors wrapped up another booming year that hoisted the S&P 500 to its second consecutive annual gain exceeding 20%, spurred by enthusiasm for rate cuts, economic strength and artificial intelligence.
The Dow Jones Industrials stepped back 29.51 points to 42,544.42.
The broader index dipped 25.31 points to 5,881.63.
The NASDAQ dropped 175.99 points to 19,310.79.
The S&P 500 has surged more than 23% in 2024, building on a gain of 24.2% from last year. The two-year gain of around 53% is the best since the nearly 66% rally in 1997 and 1998.
Meanwhile, the Dow has added almost 13% in 2024, while the NASDAQ has outperformed with a gain of 29%.
Developments in Washington, D.C., helped fuel the rally in the second half of the year. The Federal Reserve has cut its benchmark interest rate by a full percentage point since September, bolstering confidence that the U.S. economy can sustain its recent growth. Stocks also rallied sharply following President-elect Donald Trump’s win in November, as traders cheered the prospect of lower taxes and a looser regulatory approach under a Republican administration.
The enthusiasm surrounding AI and its potential productivity boost helped power the major averages to a string of record highs throughout the year. AI chip darling Nvidia and iPhone giant Apple — members of the so-called “Magnificent 7” — rose 172% and 30%, respectively, and notched new highs of their own during 2024.
Bank stocks in particular were one group that surged after the election, with JPMorgan up 41% and Goldman Sachs advancing 48%. Shares of Tesla, whose CEO Elon Musk is a close ally of Trump, closed the year up 64%.
Meanwhile, bitcoin has performed even better than the stock market, up 121% for the year and topping $100,000 for the first time.
The market is closed on Wednesday for New Year’s Day.
Prices for the 10-year Treasury lost a bit of ground, raising yields to 4.57% from Monday’s 4.54 %. Treasury prices and yields move in opposite directions.
Oil prices hiked 81 cents to $71.80 U.S. a barrel.
Prices for gold leaped $20.00 an ounce to $2,638.10 U.S.
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