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(Bloomberg) -- A string of volatile sessions for US stocks extended into 2024’s last day, marking an ominous close to an otherwise stellar year for North American equity investors.
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The S&P 500 and the Nasdaq 100 dropped for a fourth consecutive session in a year-end pullback that has shaved more than a trillion dollars from large-cap market values. Still, losses remain just a blip in a advance that has lifted the S&P 500 more than 50% since the start of 2023, the best two-year gain since the late 1990s.
While yields remained higher across maturities on Tuesday, a broad gauge of Treasuries eked out an annual gain, albeit a smaller one than in 2023. The Bloomberg Dollar Spot Index had its best year in nearly a decade.
It was a year in which stocks, particularly those of US technology companies, outshone virtually every other asset class. The S&P 500 has gained 23% in 2024, rising for the fifth time in six years, in an advance that added $10 trillion to US equity values. The MSCI All-Country World Index climbed 16%.
In fixed income, the Vanguard Total Bond market exchange-traded fund finished with a gain of 1.5% including dividends, while the Bloomberg Commodity Index was essentially unchanged. An ETF tracking a cross-asset portfolio encompassing equities, bonds and commodities, the RPAR Risk Parity ETF, was also little changed after dropping 6% in December.
Even as the US economy chugs along, cross-asset investors are heading into 2025 facing an array of challenges, first among them inflation and the Federal Reserve’s response to it — especially after Chair Jerome Powell signaled there would be fewer interest-rate cuts going forward. Another question is how President-elect Donald Trump’s pro-growth policies will affect consumer prices and federal finances.
Among individual commodities, gold had its best year since 2010. Oil rose in thin holiday trading to close out a flat performance in 2024 as the market braces for a global surplus next year. Cocoa’s 178% annual gain was driven by market volatility and concerns about supply.
European natural gas prices rose to the highest level since last November in anticipation of a halt in Russian flows via Ukraine on New Year’s Day.
European trading was muted in the final session of the year, with several markets shut on New Year’s Eve and shortened sessions in London and Paris. In Asia, trading was also thin because several regional markets including South Korea’s were shut for a public holiday. Japanese markets are closed through Jan. 6. Stocks fell in Australia and mainland China, with those in Hong Kong flat.