(Bloomberg) — A streak of volatile sessions for U.S. stocks extended into the final day of 2024, marking the close of an otherwise stellar year for North American equity investors.
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The S&P 500 and Nasdaq 100 fell for a fourth straight session in a year-end pullback that has shaved more than a trillion dollars from large-cap market values. Still, losses are still just a blip in a forward that has lifted the S&P 500 more than 50% since the start of 2023, the best two-year gains since the late 1990s.
While yields remained higher across maturities on Tuesday, a broad measure of Treasuries led to annual gains, albeit less than in 2023. The Bloomberg Dollar Spot Index had its best year in nearly a decade.
It was a year when stocks, particularly those of US technology companies, outperformed almost every other asset class. The S&P 500 has gained 23% in 2024, rising for the fifth time in six years, in an advance that added $10 trillion to US equity values. The MSCI All Country World Index climbed 16%.
In fixed income, the Vanguard Total Bond market exchange-traded fund finished with a gain of 1.5% including dividends, while the Bloomberg Commodity Index was essentially unchanged. An ETF that tracks a cross-asset portfolio covering stocks, bonds and commodities, the RPAR Risk Parity ETF, was also little changed after falling 6% in December.
Even as the US economy moves forward, cross-asset investors heading into 2025 face a variety of challenges, first among them inflation and the Federal Reserve's response to it – especially after the Chairman Jerome Powell noted that there would be fewer cuts in interest rates in the future. . Another question is how President-elect Donald Trump's pro-growth policies will affect consumer prices and federal funding.
Among individual commodities, gold had its best year since 2010. Oil rose in thin holiday trading to close flat in 2024 as the market braces for a global surplus next year. Cocoa's annual increase of 178% was driven by market volatility and supply concerns.
European natural gas prices rose to their highest level since last November in anticipation of Russia cutting off flows through Ukraine on New Year's Day.
European trading was quiet in the final session of the year, with many markets closing on New Year's Eve and shorter sessions in London and Paris. In Asia, trading was also thin as several regional markets including South Korea were closed for public holidays. Japanese markets are closed through January 6. Stocks in Australia and mainland China fell, with those in Hong Kong flat.