(Bloomberg) — A banner year for U.S. stocks is ending poorly as a retreat in tech stocks extended a losing streak that began when the Federal Reserve cooled expectations for interest rate cuts two weeks ago.
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It was the third consecutive decline for the S&P 500 and the Nasdaq 100, and also the third time the indexes fell by more than 1% in eight sessions. The Bloomberg Dollar Spot Index is on track for its best year since 2015. Treasuries took a hit on Monday, with the 10-year yield hovering around 4.54%.
Yields fell further after Chicago Purchasing Managers' Index data showed an unexpected decline. Data on Monday also showed that pending sales of US homes rose for a fourth month in November to the highest level since early 2023.
This year, the so-called Magnificent Seven cohort of US tech giants has led to a more than 20% rise in the S&P 500, while prompting some to worry that the gains are too intense in a small group of names. Still, few are calling for the rally to end and none of the 19 strategists tracked by Bloomberg expect the S&P 500 to decline next year.
“In these moments, it's better to stay put,” said Nicolas Domont, a fund manager at Optigestion in Paris. “The United States is still the place to be. Growth stocks continue to outperform and earnings prospects are good, so there are good reasons to remain optimistic.”
Elsewhere, Europe's Stoxx 600 index retreated, while Asian stocks snapped five days of gains. Trading volumes were thinner due to the holiday season.
“There is a bit of unease towards the end of the year, partly because of the uncertainty about how the international trade picture might develop in 2025,” said Tim Waterer, chief market analyst at Kohle Capital Markets Pty. “Some traders are taking risk off the table to the end of the year.”
This is the last session of 2024 for some markets including Germany, where the DAX benchmark saw an annual increase of 19%.
Among commodities, oil edged higher as traders focused on risks to 2025. US natural gas futures rose as the weather forecast for January moved colder. Gold is set for a successful year.
Carter Day of Mourning on January 9
The New York Stock Exchange, Nasdaq Inc. and Cboe Global Markets Inc. will close on January 9 to observe a national day of mourning for Jimmy Carter, the 39th president of the United States, who died on Sunday.
CME Group Inc., an operator of equity markets and interest rates in the United States, had not yet commented on its plans. The bond market will close at 2 pm New York time, as recommended by the Securities Industry and Financial Markets Association.