By Stephen Culp Reuters
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NEW YORK — Wall Street lost ground on Tuesday as investors closed the book on a remarkable year for equities, during which the U.S. stock market was powered to record highs by the twin engines of the artificial-intelligence boom and the U.S. Federal Reserve’s first interest rate cuts in three-and-a-half years.

The three major U.S. stock indexes closed in negative territory, ending a languid, low-volume session that contrasted with the tumultuous year that preceded it.

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2024 included intensifying geopolitical strife, a U.S. presidential election and shifting speculation regarding the path of Fed policy in the coming year.

“There’s no Santa Claus rally this week, but investors received the gift of gains in 2024,” said Greg Bassuk, chief executive officer at AXS Investments in New York. “2024 was a massive year for equity gains driven by a trifecta of the AI explosion, a slew of Fed interest rate cuts and a robust U.S. economy.”

“It sets the stage for continued strength heading into 2025,” Bassuk added.

The blue-chip Dow posted a 12.9% advance for the year.

Among the 11 major sectors of the S&P 500, communication services, technology and consumer discretionary were 2024’s big percentage gainers, jumping between 29.1% and 38.9% on the year.

Healthcare, real estate and energy were the only sectors that registered single-digit gains, while the materials sector was the sole 2024 decliner, dropping nearly 1.8%.

Looking ahead to 2025, financial markets are now pricing in about 50 basis points of additional interest rate cuts from the Fed, with investors eying stretched valuations and uncertainties surrounding tax and tariff policies from the administration of President-elect Donald Trump.