Stocks Skid At End Of Best S&P 500 Run Since 1990s: Markets Wrap

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. 

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.