U.S. Stock Market Overview

U.S. stock markets faced a downturn on Monday, continuing a trend for Wall Street as it gears up to end a remarkable year on an unexpectedly sour note.

The S&P 500 index slipped by 1.1%, marking its third consecutive day of losses with approximately 90% of its component stocks experiencing declines. Despite this downturn, the index is poised to conclude the year with a robust gain of over 20% for the second consecutive year, underscoring a generally positive year for U.S. equities.

In a similar fashion, the Dow Jones Industrial Average saw a drop of 1%, while the Nasdaq Composite fell by 1.2%. Technology stocks, particularly the giants, took a significant toll on the overall market. Major players like Apple and Microsoft each dropped about 1.3%. Given their lofty valuations, these tech titans can heavily sway market movements.

Technology Sector Performance

Other tech firms weren't spared either; Meta Platforms fell 1.4%, Netflix dipped 0.8%, and Amazon depreciated by 1.1%. The technology and communication services sectors remained bright spots in an otherwise rocky landscape, boasting spectacular yearly gains of 37.1% and 39.9%, respectively.

Boeing's Ongoing Troubles

Meanwhile, Boeing's troubles compounded, as shares fell 2.3% following a tragic accident involving one of its jets in South Korea that resulted in substantial loss of life. This accident prompted safety inspections of all Boeing 737-800 aircraft operating in South Korea. Boeing's stock has suffered greatly this year, plunging more than 30%, compounded by previous strikes and other safety concerns.

Airlines Effected by Uncertainty

Airlines operating Boeing aircraft reflected the uncertainty, with United Airlines dipping 1.4% and Delta Air Lines decreasing by 0.9%.

Market Closing Figures

By the closing bell, the S&P 500 fell by 63.90 points to settle at 5,906.94. The Dow closed at 42,573.73 after losing 418.48 points, while the Nasdaq ended at 19,486.78, down by 235.25 points.

Bond Market and Oil Prices

In the bond market, yields showed a slight decrease with the 10-year Treasury yield slipping to 4.53% from 4.63%, and the two-year Treasury yield down to 4.25% from 4.33% late on Friday. On another note, the price of U.S. crude oil saw a 0.6% lift. Energy stocks held steadier compared to the broader market, with a modest decline of just 0.1%. Natural gas prices surged by an impressive 12%, boosting shares of natural gas producers; EQT Corp. marked the highest gain among S&P 500 stocks, climbing 5.1%.

International Markets and Overall Economic Outlook

International markets echoed similar bearish sentiments, primarily in Europe and Asia.

Despite the current turbulence, 2024 has been characterized by a flourishing economy, strong consumer spending, and a healthy job market. Analysts predict that companies within the S&P 500 will announce an overall earnings growth of over 9% for the entire year, with final figures expected following fourth-quarter reporting starting soon.

Throughout 2024, decreasing inflation rates fostered optimism that the Federal Reserve would continue cutting interest rates—a positive sign for borrowing costs and prospective economic growth. However, warnings of persistent inflation have emerged, fueled by tariff threats from the incoming administration and rising consumer prices, now slightly up at 2.7%.

Looking Ahead to 2025

As 2024 winds down, market watchers had anticipated a typical 'Santa Claus rally' to lift spirits during this festive season, although recent performance suggests otherwise. “The ‘Santa Claus rally’ that many were hoping for may have occurred earlier in November,” noted Keith Buchanan, Senior Portfolio Manager at Globalt Investments.

As we approach the New Year holiday, investors face a quieter week—markets will be closed Wednesday. However, Thursday brings key data on U.S. construction spending, followed by an update on manufacturing figures on Friday, which could influence market directions as 2025 approaches.

Stay tuned for further developments as Wall Street navigates these challenging waters!