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The market's party took a pause Monday as U.S. stocks slid in one of the final trading days of 2024. The Dow (DIA) dropped 1.2% (down 505 points), the S&P 500 (SPY) lost 1.2%, and the Nasdaq (NASDAQ:QQQ) tumbled 1.4%. But let's not lose perspective2024 has been a blockbuster year, with the S&P 500 and Dow soaring 23% and 14%, respectively, their best performance since 2021. The Nasdaq? Up a jaw-dropping 30%, heading into its longest quarterly winning streak since 2021. Monday's dip? It's likely just year-end profit-taking in a thinly traded market, as investors eye the famed "Santa Claus Rally," which historically fuels a January bounce.
Economic tea leaves are already swirling for 2025. Goldman Sachs is calling for a rate cut trifecta, starting with a 25-basis-point trim in March, followed by cuts in June and September, to land in a sweet spot of 3.5%-3.75%. And it's not just about rates. Goldman also expects the Fed to wind down its balance sheet runoff by mid-year. Meanwhile, Monday's data was a mixed bagChicago PMI fell short of expectations, keeping investors wary about growth momentum. On the bright side, Treasury yields eased, offering a breather for the growth-heavy tech sector.
Over in the corporate world, Boeing (NYSE:BA) had a rough day, dropping over 4% after a tragic plane crash in South Korea. In the energy space, crude oil ticked up slightlyWTI and Brent both rose 0.8%but the broader picture isn't so rosy, with both benchmarks looking at annual losses tied to softening Chinese demand. As investors wind down 2024, the real question is whether January will come roaring in with a rally or start with a reset. Either way, the stage is set for what promises to be an action-packed 2025.
This article first appeared on GuruFocus.