Wall Street's main indexes opened higher in the final session of 2024, extending a more than two-year bull market boosted by post-pandemic economic resilience, optimism about lower borrowing costs and the AI revolution.
In morning trading, the Dow Jones Industrial Average rose 73 points, or 0.2%, to $42,647. The S&P 500 rose 0.1% and the Nasdaq was flat.
The S&P 500, Dow, and Nasdaq are near all-time highs and are expected to rise for the second consecutive year.
Stocks are set to hit a record high in 2024 as the Federal Reserve cuts interest rates by nearly 100 basis points in 2024 and technology stocks rise in anticipation of artificial intelligence boosting corporate profits. The value soared.
Tech stocks, communications services stocks and consumer staples stocks have risen more than 30% this year.
Nvidia's more than 170% jump this year, a powerhouse of AI, was smaller than last year's, but it pushed the company's market capitalization to $3 trillion and helped Tesla return to the $1 trillion mark.
Nvidia fell 0.5%, while Elon Musk's automaker rose 1.1%. Movement is expected to be affected by thin volume ahead of the New Year holiday on Wednesday.
Most of the 11 S&P 500 sectors rose, led by energy stocks as oil prices rose.
Towards the end of the year, risk-taking improved as President Donald Trump's victory increased expectations that he would follow through on his promises of deregulation, tax cuts and higher tariffs to support domestic businesses.
His victory also boosted small-cap stocks. The Russell 2000 hit an all-time high, posting a nearly 10% increase for the second year in a row. Bank stocks are up nearly 35% this year.
However, stock prices were in turmoil in December, with the S&P 500 expected to see its steepest monthly decline since April due to rising Treasury bond yields amid high stock valuations and a cautious Fed. Ta.
The benchmark 10-year Treasury yield fell to 4.5% as inflation concerns related to President Trump's policies raise the possibility that the Fed will ease interest rate cuts in 2025.
“Stocks are unlikely to rise further until there is more clarity on what the next administration's tax and tariff policies will be,” said Rafi Boyajian, chief market analyst at brokerage XM.
“How earnings expectations develop over the next few months is extremely important for Wall Street, and especially for tech and AI stocks.”
Traders expect the first rate cut of 2025 to occur in March or May.
Meanwhile, Trump's victory revitalized crypto stocks, with Bitcoin reaching $100,000.
MicroStrategyshares has soared over 300% this year as it continues to buy and hold Bitcoin. Shares rose 1.9% on Tuesday, with Coinbase and MARA Holdings up 0.5% and 0.8%, respectively.
