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Stocks closed lower on Tuesday as investors wrapped up one other strong year that saw the S&P 500 gain its second consecutive annual gain of greater than 20%, helped by enthusiasm for rate of interest cuts, economic strength and artificial intelligence.
The Dow Jones Industrials retreated 29.51 points to 42,544.42.
The broader index fell 25.31 points to five,881.63.
The NASDAQ fell 175.99 points to 19,310.79.
The S&P 500 Index is up greater than 23% in 2024, after gaining 24.2% from last year. The two-year increase of about 53% is the best since nearly 66% growth in 1997 and 1998.
Meanwhile, the Dow is up almost 13% in 2024, while the NASDAQ has outperformed, gaining 29%.
Events in Washington helped fuel the rally in the second half of the year. Since September, the Federal Reserve has cut its benchmark rate of interest by a full percentage point, strengthening confidence that the U.S. economy will have the ability to keep up recent growth. Stock markets also surged following President-elect Donald Trump’s November win as investors cheered the prospect of lower taxes and a looser regulatory approach under a Republican administration.
Enthusiasm around artificial intelligence and its potential productivity gains helped keep headline averages at record levels throughout the year. AI favorite Nvidia and iPhone giant Apple – members of the so-called “Magnificent 7” – rose 172% and 30% respectively, reaching their very own records in 2024.
Bank stocks, in particular, were amongst the groups that surged after the election, with JPMorgan up 41% and Goldman Sachs up 48%. Shares of Tesla, whose CEO Elon Musk is a close Trump ally, closed the year up 64%.
Meanwhile, bitcoin performed even higher than the stock market, rising 121% for the year and surpassing $100,000 for the first time.
The market is closed on Wednesday for the New Year.
Prices of 10-year Treasury bonds fell barely, pushing the yield to 4.57% from Monday’s high of 4.54%. Treasury bond prices and yields are moving in opposite directions.
Crude oil prices rose 81 cents to $71.80 a barrel.
Gold prices rose by $20.00 per ounce to US$2,638.10