The US stock market closed out 2024 on a high note, with the S&P 500 delivering a remarkable 23.31% annual gain, marking its second consecutive year of exceeding 20% growth. However, the final trading session of the year saw a modest pullback across major indices as investors locked in profits from a stellar year fuelled by optimism around Federal Reserve rate cuts, economic resilience, and breakthroughs in artificial intelligence. While the Nasdaq posted a 28.64% gain for the year and the Dow rose 12.88%, December’s subdued performance reflected a cautious tone heading into 2025. Market sentiment remained resilient, underscored by AI-driven rallies and renewed confidence in US economic strength, despite challenges in global markets and lingering inflationary pressures.

Key Takeaways:

  • S&P 500 Posts a 23% Annual Gain Despite Year-End Pullback: The S&P 500 concluded 2024 with an exceptional 23.31% annual gain, solidifying its position as a standout performer for the second consecutive year. The two-year rally of 53% is the most significant since 1997–1998. However, December’s performance proved challenging, with the index slipping 2.5% for the month, including a 0.43% decline on the final trading day, closing at 5,881.63. 
  • Nasdaq Leads with a 28.64% Annual Surge: The Nasdaq Composite outpaced other indices with an impressive 28.64% gain in 2024, driven by strong performances in technology and growth stocks. It closed the year at 19,310.79 after dipping 0.9% on the final trading day. While AI-related stocks like Nvidia, which soared 171% for the year, were instrumental in the Nasdaq’s rise, profit-taking during the last few sessions capped its December performance at a modest 0.5% gain.
  • Dow Jones Posts a Solid 12.88% Gain but Struggles in December: The Dow Jones Industrial Average rose 12.88% in 2024, reaching 42,544.22 by year-end. However, it closed slightly lower by 0.07% on the final trading day. The Dow underperformed in December, falling 5.3%, its weakest monthly performance of the year. 
  • European Markets Close 2024 on a High Note: European markets ended the year on a positive trajectory, with the pan-European Stoxx 600 climbing 5.9% in 2024. Banks led the charge with a remarkable 25% gain, followed by telecoms (+15.8%) and financial services (+15%). On the final trading day, the index rose 0.4%, supported by gains across all sectors. London’s FTSE 100 closed 0.6% higher, marking its fourth consecutive yearly gain, while France’s CAC 40 rallied 0.9%, though it ended the year down 2.2% amid ongoing political turbulence. Spain’s IBEX rose 0.5% on the day, with a 4% annual increase, and the Dutch AEX outperformed, gaining nearly 0.8% in its final session. Germany’s DAX stood out with a robust 19% annual gain despite being closed for the final trading day. 
  • Asian Markets See Mixed Results as China Rebounds: Mainland China’s CSI 300 ended a three-year losing streak, gaining 15% for the year, despite a 1.6% drop in the final trading session. Hong Kong’s Hang Seng Index surged nearly 18% in 2024, also breaking a multi-year losing streak. Taiwan’s Taiex outperformed Asian markets with a stellar 29% gain for the year, while Australia’s S&P/ASX 200 added 8.5%. In contrast, Japan and South Korea’s markets were closed for the New Year holiday, with South Korea’s consumer inflation accelerating to 1.9% year-over-year in December.
  • Oil Prices Decline for the Second Straight Year Amid Weak Demand: Brent crude prices fell 3% in 2024, closing the year at $74.64 per barrel, marking their second consecutive annual decline. US West Texas Intermediate crude followed a similar pattern, ending the year flat at $71.72 per barrel. Oil markets struggled under the weight of sluggish Chinese demand, rising global supplies, and fading post-pandemic recovery momentum. 
  • US Treasury Yields Rise Sharply in 2024: The 10-year US Treasury yield ended the year at 4.57%, rising sharply from its sub-3.9% starting point in January. Long-term yields experienced significant volatility, peaking above 4.7% in the spring before retreating in September and climbing again in the year’s final months. The 2-year Treasury yield finished at 4.24%, reflecting investor concerns over economic growth and Federal Reserve policy adjustments. 

FX Today:

  • EUR/USD Approaches Key Support as Downtrend Deepens: EUR/USD traded at 1.0354 on Tuesday, edging closer to critical support near the 1.0300 level. Breaking below the 200-day SMA signals a bearish long-term outlook for the euro. If EUR/USD breaches the 1.0300 support level, it could extend losses toward 1.0200 in the coming sessions. On the upside, immediate resistance is positioned at 1.0500, aligning with the 50-day SMA. A decisive move above this level could pave the way for a test of 1.0600, but current momentum indicators suggest further downside risks unless market sentiment shifts dramatically.
  • GBP/USD Holds Below 1.26 Amid Continued Selling Pressure: GBP/USD remained subdued at 1.2511, reflecting ongoing bearish momentum. The pair has struggled to break above key resistance levels, constrained by its 50-day and 200-day SMAs, which both slopes downward. Immediate support lies at 1.2400, and a break below this level could see the pair test 1.2300 in the near term. While sterling emerged as the best-performing G10 currency against the US Dollar in 2024, a drop of over 6% in the fourth quarter underscores the challenges posed by weaker economic data and persistent US Dollar strength. For any recovery, the pair would need to clear resistance levels at 1.2600 and 1.2700, but bearish sentiment remains dominant.
  • AUD/USD Extends Downtrend Below 0.62: AUD/USD fell to 0.6189, continuing its sharp decline as bearish sentiment grips the pair. Trading below the 50-day, 100-day, and 200-day SMAs confirms a deeply negative outlook. The Australian Dollar has struggled amid weaker commodity prices and mixed economic data from China, its largest trading partner. Immediate support is located at 0.6150, with a break below this level potentially exposing the key psychological barrier of 0.6000. Resistance at 0.6300 and 0.6400, now turned from previous support levels, may cap any recovery attempts. 
  • USD/JPY Tests 157 as BoJ Rate Speculation Intensifies: USD/JPY traded at 157.31, supported by a robust uptrend fuelled by speculation that the Bank of Japan may raise interest rates in January. The pair is nearing resistance at 158.00, with a potential breakout targeting the psychological level of 160.00. Strong technical indicators, including trading above the 50-day and 200-day SMAs, underline the bullish structure. However, support at 155.00 remains critical; a break below this level could signal a pause in the uptrend. For now, the pair continues to trend higher, bolstered by the divergence between BoJ and Federal Reserve policies.
  • XAU/USD Holds Firm Above $2,600 as Consolidation Continues: Gold prices remained elevated at $2,623 per ounce on Tuesday, consolidating near record highs after a stellar year. The precious metal surged over 26% in 2024, driven by central bank buying, policy easing, and geopolitical tensions. Immediate resistance is seen at $2,650 and $2,685, while support lies at $2,600, with a further decline potentially exposing $2,550. Despite recent profit-taking, the outlook for gold remains bullish, with fundamentals such as inflation concerns and economic uncertainty likely to sustain upward momentum. Traders are closely watching for signs of a breakout above $2,650, which could pave the way toward $2,700 in the coming sessions.

Market Movers:

  • Intel Gains Despite a Challenging Year: Intel shares rose 1.2% on the final trading day of 2024, offering a modest recovery after a brutal year in which the stock plunged over 60%. The semiconductor giant has struggled with declining market share and sluggish demand, making 2024 its worst year on record. 
  • Sangamo Therapeutics Plunges on Partnership Termination: Sangamo Therapeutics shares tumbled more than 56% after Pfizer announced the termination of their license and development agreement for a gene therapy targeting hemophilia A. 
  • Biohaven Rises After Director Increases Stake: Biohaven shares climbed 4.4% on news that director John Childs purchased 29,000 shares, bringing his total ownership to approximately 6.5 million shares. The insider buying boosted investor confidence in the biopharmaceutical company, which has faced volatility in recent months.
  • Nutriband Jumps on Expedited Review for Opioid Patch: Nutriband shares soared 12.7% after the company announced it expects an expedited review process for its abuse-deterrent opioid patch, AVERSA Fentanyl. 
  • JPMorgan and Goldman Sachs Post Strong Annual Gains: Banking giants JPMorgan and Goldman Sachs soared 41% and 48%, respectively, in 2024, capitalising on the broader market rally and renewed confidence in the financial sector. Both stocks gained significant momentum following the November election, which signalled potential regulatory and tax relief under the incoming administration.
  • Zivo Bioscience Gains on Insider Buying: Zivo Bioscience shares rose nearly 3% after investor Mark Strome, who holds a 10% stake in the company, purchased an additional 75,000 shares. 

As 2024 comes to a close, markets showcased a mix of remarkable gains and cautious retreats, reflecting the complexities of a dynamic year. The S&P 500’s 23.31% surge and the Nasdaq’s 28.64% rally underscored the strength of US equities, driven by optimism around rate cuts, economic resilience, and transformative technologies. European markets ended on a positive note, with the Stoxx 600 up 5.9% for the year, while Asia saw mixed results, highlighted by China’s CSI 300 gaining 15% and Taiwan’s Taiex leading with a 29% rise. With evolving global economic conditions and key policy shifts on the horizon, markets remain poised for another pivotal year ahead.