With a red day today, the S&P 500 would be down 4 days in a row to end the year.
That would be the longest losing streak to end any year since 1966 (that year had 5). Hmmm.
Stocks did gain 20% in 1967 though 😊
— Ryan Detrick, CMT (@RyanDetrick) December 31, 2024
The stock market kicked off 2025 on a volatile note, with major indices closing lower on the first trading day of the year. The Dow Jones Industrial Average fell 152 points, or about 0.4%, while the S&P 500 and Nasdaq Composite both slipped 0.2%, marking their fifth consecutive decline. The market initially rose, with the Dow up more than 300 points at session highs, but gains reversed in late morning trading.
The Dow’s intraday swing from high to low was more than 700 points.
Since 1928, the S&P 500 has posted an average overall gain of 1.2% in January….gains have been positive 62% of the time pic.twitter.com/2CmhrFhOo8
— Liz Ann Sonders (@LizAnnSonders) January 2, 2025
Tech giant Apple weighed on the market, falling 2.6%, while Tesla fell 6% after reporting a decline in annual deliveries for 2024. Chipmaker Nvidia rose 3%, helping to offset some of the declines from other Big Tech stocks.
Hedge funds/large speculators remained net short S&P 500 futures right before Christmas pic.twitter.com/j1Dk5S93fh
— Liz Ann Sonders (@LizAnnSonders) January 2, 2025
Edward Jones senior investment strategist Angelo Kourkafas told CNBC, “If you think about the market moving two steps forward, one step back, we’re in that one-step back phase after a stellar 2024. Valuations and sentiment have swung to the optimistic euphoric side, so we’re seeing the market work through those overbought conditions in the short term.”
Per the @WSJ, US “stocks on pace for best two years in a quarter of a century.”#markets #stocks #investors #investing pic.twitter.com/UBWG8wlDl5
— Mohamed A. El-Erian (@elerianm) December 31, 2024
Despite the decline in major averages, market breadth was positive, with stocks on the New York Stock Exchange split evenly between advancers and decliners.
Stocks close lower on volatility
On the Nasdaq, more stocks were rising than falling. Bond yields were also volatile, with the benchmark 10-year Treasury yield rising to nearly 4.6% at one point before retreating. A jobless claims report showed both initial and continuing unemployment claims falling week over week, contributing to the choppy trading environment.
HSBC noted a “choppy” trading environment across all asset classes, attributed to the Federal Reserve’s hawkish messaging at its December meeting. Max Kettner, the bank’s chief multi-asset strategist, said, “This means that January is likely to remain choppy for virtually all asset classes, but should create attractive entry points given that fundamentals are still on a solid footing.”
In the financial sector, Wells Fargo had a positive outlook on banks this year, with analyst Mike Mayo stating, “This is the most positive regulatory change environment for banks in 3 decades.” Mayo highlighted expectations for growth in various areas, including net interest income, loans, deposits, and EPS. Among individual stocks, Tesla slipped 5%, while Unity Software surged 9%.
Shares of Babcock & Wilcox jumped 7% after securing a contract to supply nuclear energy to the U.S. federal government. The market averages closed the first day of 2025 in the red, with the S&P 500 falling for the fifth straight session, its longest losing streak since a six-day slide ending April 19 of last year.
