Day Traders Diary

12/31/24

The major averages closed in the red to end 2024 but wrapped up another great year boosting the S&P 500 to its second consecutive annual gain exceeding 20%, spurred by enthusiasm for rate cuts, economic strength and artificial intelligence stocks.

The Dow Jones Industrial Average fell 29 points to close at 42,544. The Dow rose 12.88% on the year. The S&P 500 fell 25 points or 0.43% but rose 23.31% for the year for a two-year gain of 53%, its best return since the nearly 66% rally in 1997 and 1998. The Nasdaq fell 175 points or 0.9% to 19,310 on the day. On the year, the Nasdaq outperformed, rising 28.64%.

The year in the markets can be best described by the enthusiasm surrounding AI and its potential to boost productivity. Many AI stocks fell today, but AI chip darling Nvidia and iPhone giant Apple, members of the Magnificent 7, rose 171% and 30% boosting their market caps over the $3 trillion mark.

The tech rally was helped fueled by the November Presidential election and the Federal Reserve 2024 rate cuts to help fuel better economic growth in 2025.

Bank stocks were modestly higher today but had a strong yearend rally following the election.JPMorgan and Goldman Sachs both rose over 40% on the year. Shares of Tesla rose over 60% thanks in part to CEO Elon Musk close ties to President elect Trump.

Bitcoin was another investment that performed well since the election, rising 119% for the year, rising over $100,000 for the first time this year before pulling back.

For the month of December, the Dow ended the month down 5.3%. The S&P fell by 2.5%, while the Nasdaq grinded out a gain of 0.5%. For the fourth quarter, the Nasdaq and S&P gained 6.2% and 2.1%, respectively, for a fifth consecutive positive quarter for the first time since 2021. The Dow rose just 0.5%, its fourth positive quarter in five.