Wall Street skids at end of best S&P 500 run since 1990s

A string of volatile sessions for US stocks extended into 2024’s last day, marking an ominous close to an otherwise stellar year for investors on Wall Street.

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 US dollars from large-cap market values. Still, losses remain just a blip in an advance that has lifted the S&P 500 more than 50 per cent since the start of 2023, the best two-year gain since the late 1990s.

The S&P 500 closed 0.4 per cent lower, the Nasdaq 100 fell 0.9 per cent and the Dow Jones Industrial Average was little changed from Monday’s session. The losses come after the ASX finished its New Year’s Eve session in red, trimming its annual advance to 7.5 per cent, short of last year’s. Sharemarkets are closed on Wednesday for New Year’s Day.

New Year’s Eve on the New York Stock Exchange. It’s been a good year for Wall Street.Credit: Bloomberg

While bond yields remained higher across maturities on New Year’s Eve, 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 per cent in 2024, rising for the fifth time in six years, in an advance that added $US10 trillion ($15.6 trillion) to US equity values. The MSCI All-Country World Index climbed 16 per cent.

In fixed income, the Vanguard Total Bond market exchange-traded fund finished with a gain of 1.5 per cent including dividends, while the Bloomberg Commodity Index was essentially unchanged.

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 signalled there would be fewer interest-rate cuts going forward. Another question is how President-elect Donald Trump’s America First 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 per cent 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 January. Stocks fell in mainland China, with those in Hong Kong flat.

Bloomberg, with staff writers