The stock market kicked off 2025 with a volatile start as significant indexes closed lower. The Dow Jones Industrial Average fell 151.95 points, or 0.36%, to 42,392.27. The S&P 500 slipped 0.22% to 5,868.55, while the Nasdaq dipped 0.16% to 19,280.79.
The S&P 500 fell 1.5% the last 5 days of 2024, the worst end to a year since 2005. pic.twitter.com/bYVMg6oMnb
— Ryan Detrick, CMT (@RyanDetrick) January 6, 2025
S&P 500 down the last trading day of the year and first day of the following year?
Happened the past 3 years actually and '23 and '24 both did fine.
I wouldn't ever invest in just this, but interesting given all the talk about recent weakness. pic.twitter.com/OOnujvo8YR
— Ryan Detrick, CMT (@RyanDetrick) January 5, 2025
The S&P 500 and Nasdaq extended their losing streaks to five sessions, marking their longest downward trend since April. The market initially showed gains, with the Dow rising more than 300 points at session highs, but the gains reversed in late-morning trading. Tech giant Apple weighed on the market, falling 2.6%, and Tesla dropped 6% after reporting a decline in annual deliveries in 2024.
However, Chipmaker Nvidia rose 3%, helping offset some of the declines from other Big Tech stocks. The disappointing start to the year follows a solid 2024 for stocks, which ended on a sour note.
Stock market’s volatile new year start
Despite broad-based sell-off in December, vast majority of global indices closed 2024 in black across asset classes; U.S. large caps reigned supreme, with S&P 500 soaring 25% in 2024 despite December’s 2.4% drop; outside U.S., China was best-performing major equity market with… pic.twitter.com/DA17kFk2gC
— Liz Ann Sonders (@LizAnnSonders) January 6, 2025
The S&P 500 surged 23% last year but finished with four straight down days for the first time since 1966. Edward Jones senior investment strategist Angelo Kourkafas noted that valuations and sentiment had swung to the optimistic side, leading the market to work through overbought conditions in the short term. The continuing losing streak makes it difficult for a “Santa Claus rally” to materialize.
This well-known market indicator is characterized by rising stocks in the five final days of the calendar year and January’s first two trading days. Bond yields were also volatile on Thursday, with the benchmark 10-year Treasury yield rising to nearly 4.6% at one point before retreating. Higher rates may make fixed income an attractive alternative for investors concerned about the stock market’s valuation.
SoFi’s head of investment strategy, Liz Young, said in a televised interview, “If we don’t want to buy at all-time highs, you can now still earn good money in cash. Let it sit there, wait for a better entry point, and wait for it in certain stocks.”
In economic data, a jobless claims report showed initial and continuing unemployment claims falling weekly.
