Markets Eye Finish Line as 2024 Draws to a Close
As the final trading days of 2024 tick away, Wall Street is bracing for a potentially lackluster finish to an otherwise stellar year. With just three trading sessions left, investors are hoping to revive the traditional “Santa Claus” rally that typically propels markets higher into year-end.
Futures Point to Downbeat Open
Friday’s market open looks set to be a subdued affair, with S&P 500 futures slipping 0.3%, alongside similar declines in Nasdaq and Dow Jones Industrial Average futures. The 10-year Treasury yield, meanwhile, continues to hover near seven-month highs, around 4.6%.
A Year of Gains
Despite the recent sluggishness, the benchmark S&P 500 has still managed to notch an impressive 26% gain for the year, while the Nasdaq Composite has surged over 30%. The Dow Jones Industrial Average, though lagging behind, has still posted a respectable 14% rise.
Looking Ahead to 2025
With the year’s key economic data points largely digested, investors are now shifting their focus to two critical themes that will shape the market’s trajectory in 2025: the Federal Reserve’s interest rate path and the implications of Donald Trump’s return to the White House.
Interest Rate Expectations
Markets have largely absorbed the Fed’s plans to slow rate cuts next year, with bets now firmly placed on May as the next meeting at which interest rates will be slashed. As the central bank grapples with persistent inflation and a cooling labor market, investors will be closely watching for signs of a more dovish stance.
Trump’s Economic Agenda
While Trump touted his ambitious economic plans during the campaign, those promises may soon face a reality check from other key power players. As the new administration takes shape, investors will be keenly watching to see how Trump’s policies will be received and implemented.
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