US stocks ended Friday in the red, closing out a lackluster week despite a year of historic highs. The Dow fell 333 points, or 0.78%, while the S&P 500 lost 1.1% and the Nasdaq Composite dropped 1.5%. Big Tech stocks like Tesla, Amazon, Alphabet, Microsoft, and Nvidia also declined.
The “Magnificent Seven” group of high-performing tech stocks has driven much of this year’s gains, but analysts warn that a broad market is needed to mitigate risks. A decline in any one of these companies could have a ripple effect on the entire market.
Bitcoin’s late-year rally fizzled out due to profit-taking, with the cryptocurrency dropping to around $94,000 by Friday evening. Treasury yields rose, and trading volume was thin due to the shortened holiday week, which amplified any moves. Despite the selloff, there is no major news driving market reactions.
This trend is not uncommon during Christmas weeks, when traders are on vacation and buying and selling can have a significant impact on stock indexes. Low trading volume also increases volatility, as traders opt to take profits and exit positions.
Historically, December has seen dramatic market moves, often without any clear reason or news. However, experts predict that stocks will continue to outperform bonds in 2025, making them a good investment against inflation. Investors are advised to maintain their equity exposure into the new year.
Source: https://edition.cnn.com/2024/12/27/investing/dow-stock-market-fall/index.html