Key Takeaways:
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• S&P 500 set to finish 2024 with 24% gain, driven by Magnificent Seven tech stocks
• US Dollar Index heading for best annual performance since 2015
• Gold poised for remarkable 26% annual gain
• Chinese manufacturing shows continued expansion
What Happened?
US equity futures showed modest gains on the final trading day of 2024, looking to end a three-day losing streak. The S&P 500’s impressive 24% annual gain was largely driven by major tech companies. The dollar maintained its strong position, benefiting from Trump’s reelection and the Federal Reserve’s policy stance. Gold is set to close with a 26% annual gain, while oil prices increased on positive Chinese manufacturing data.
Why It Matters?
This year-end performance reflects significant shifts in global markets and investor sentiment. The strong dollar and tech-led stock rally demonstrate the US market’s resilience, while gold’s substantial gains indicate ongoing demand for safe-haven assets. The market’s response to Chinese economic data and US-China tensions highlights the delicate balance of global economic relationships. These movements provide crucial insights into market dynamics and investor priorities heading into 2025.
What’s Next?
Investors face several key challenges in 2025, including the implementation of President-elect Trump’s trade policies, central bank monetary decisions, and the health of major global economies. Markets will be particularly focused on US-China relations, especially following recent cybersecurity incidents. The tech sector’s performance, interest rate trajectories, and geopolitical developments will be crucial factors shaping market sentiment. Investors should watch for potential policy shifts, their impact on currency markets, and continued evolution in US-China economic relations.
