As 2024 progresses, US benchmark equity indexes have shown a slight decline ahead of Tuesday's close; however, they are poised to achieve double-digit gains for the year. The Nasdaq Composite experienced a 0.5% drop, settling at 19,382.2, while the S&P 500 followed with a 0.3% decrease to 5,891.8. The Dow Jones Industrial Average also faced a minor loss of 0.1%, bringing it to 42,531.8.
This downward movement may seem concerning, yet the overall performance for the year remains remarkably strong, with the Nasdaq soaring 29%, the S&P 500 climbing 24%, and the Dow reflecting a more modest 13% increase. Investor sentiment is notably positive as we enter 2025. The results from the November US presidential election have played a significant role in bolstering expectations for pro-growth policies, setting an optimistic tone among market participants.
Insights from D.A. Davidson in a Friday note to clients indicated, "Investor sentiment is high entering 2025 as several of the 2024 positive trends that remain in place were bolstered by November (US presidential) election results, which ignited pro-growth policy expectations. This sets up conditions for equity prices to move higher if the US economy sustains growth above 2% and corporate earnings grow above 10%." As we navigate through the week, it is essential to recognize that markets will be closed on Wednesday in observance of New Year's Day, allowing investors to pause and reflect on the market developments thus far. Tuesday's sector performance was mixed, with technology stocks declining by 0.7%, marking it as the steepest decliner of the day.
Conversely, energy stocks led the gainers, reflecting a dynamic shift in market focus among different sectors. In the bond market, the US 10-year yield climbed by 2.8 basis points, reaching 4.57%. Meanwhile, the two-year rate saw a decrease of 1.4 basis points, settling at 4.24%. On the commodities front, West Texas Intermediate crude oil increased by 1.3%, trading at $71.88 a barrel.
The fluctuations in these key financial indicators highlight the intricate interplay of economic data and market perceptions that investors must navigate in the current landscape..