In the final trading week of 2024, stock markets experienced a downturn despite an otherwise strong year. Major indexes like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all saw significant drops, with tech-heavy stocks leading the decline. Meanwhile, natural gas futures soared by as much as 20%, driven by increased demand for fuel due to colder weather forecasts. Additionally, the housing market showed resilience with a fourth consecutive month of rising contract activity. The New York Stock Exchange and Nasdaq announced they would close on January 9, 2025, in honor of former President Jimmy Carter, who passed away at the age of 100.
Market Performance and Key Events
As the calendar turned into the last week of 2024, investors witnessed a series of fluctuations in the financial markets. On Monday, the benchmark S&P 500 fell approximately 1.6%, while the technology-focused Nasdaq Composite dipped around 1.7%. The blue-chip Dow Jones Industrial Average also declined by more than 1.6%. These declines were partly attributed to a retreat in the 10-year Treasury yield from its seven-month high, settling near 4.56%. The anticipated "Santa Claus rally," typically a robust period for stocks starting from December 24, failed to materialize this year, with the S&P 500 barely registering any gains during this period.
In other developments, natural gas futures surged sharply on Monday, increasing by up to 20% for February delivery. This marked the largest one-day move since the contract began trading in 2012. The energy sector was the only bright spot in the S&P 500, climbing about 0.15%. Concurrently, the housing market demonstrated surprising strength. According to the National Association of Realtors, the Pending Home Sales Index rose 2.2% from October to November, reaching its highest level since February 2023. Lawrence Yun, NAR’s chief economist, noted that consumers were adapting to higher mortgage rates and taking advantage of increased inventory.
Reflections on Market Trends and Future Outlook
The closing days of 2024 offer a mixed picture of market performance. While the overall year has been marked by substantial gains—with the S&P 500 up over 25%, the Nasdaq surpassing 30%, and the Dow rising by 14%—the final week has seen a pullback. The failure of the traditional Santa Claus rally suggests caution among investors, but it does not overshadow the remarkable achievements of the past year. The resilience shown by the housing market and the surge in natural gas prices highlight the complexity and unpredictability of economic indicators. As we look forward, the closure of stock exchanges on January 9 in honor of President Carter serves as a poignant reminder of the broader context in which these financial events unfold. Investors will need to remain vigilant, balancing optimism with prudence as they navigate the uncertainties of the new year.