As we wrap up 2024, equity investors have plenty to reflect on. While the final quarter wasn’t as strong as the first three, the year still delivered positive returns, new market highs, and an optimistic outlook heading into 2025. Historically, the fourth quarter has been a strong period for equities, and despite some market fluctuations, this year followed suit.
Markets entered Q4 with solid momentum, fueled by optimism after the election results in early November. Investor confidence was further bolstered by continued monetary easing from the Federal Open Market Committee (FOMC), which played a key role in shaping market performance.

By year-end, the S&P 500 had nearly matched its stellar 2023 performance, closing with a gain of more than 23% (compared to 24.23% in 2023) and setting 57 record highs. The Dow Jones Industrial Average (DJIA) also ended on a positive note, gaining nearly 13% for the year, closely aligning with its 13.7% increase in 2023. (Sources: www.macrotrends.net; cnbc.com 1/2/25)
However, the final quarter wasn’t without its challenges. The S&P 500, after a year of impressive gains, slowed down to post its lowest quarterly return at around 2.0%. Meanwhile, the DJIA eked out a gain of less than 1% for the quarter. (Source: cnbc.com 1/2/25)
A major factor shaping the markets in 2024 was the Federal Reserve’s decision to reduce interest rates three times throughout the year—twice in the fourth quarter, in November and December. The Fed’s moves were driven by economic indicators such as a 4.2% unemployment rate in November and a 0.4% increase in wage growth. The FOMC closely monitors these metrics as it navigates monetary policy decisions.
Looking Ahead: 2025 Brings Uncertainty for Investors
Despite a strong finish in 2024, investors are bracing for a year filled with potential challenges. Three key factors are shaping the outlook for 2025:
1. A New Administration
With President Trump returning to the Oval Office, new policies and economic strategies are on the horizon. While the details remain unclear, any shifts in fiscal policy, trade, or regulation could have significant impacts on both U.S. and global markets.
2. Evolving Monetary Policy
Although the Fed implemented three rate cuts in 2024, its stance for 2025 has turned more cautious. While inflation remains above the Fed’s 2% target, the central bank must also balance economic growth and employment. In December, policymakers signaled that the pace of rate cuts might slow or even pause in the coming year.
3. Geopolitical Tensions
Ongoing global conflicts continue to create economic uncertainty. The Russia-Ukraine war and tensions in the Middle East remain unresolved, while proposed tariffs on foreign imports could further impact equities and the broader U.S. economy.
Staying Focused on Your Financial Goals
While uncertainty looms, one thing remains constant—our commitment to helping you navigate changing market conditions. As your financial professionals, we continuously review investment strategies to ensure they align with your time horizon, risk tolerance, and long-term goals.
As we enter 2025, staying informed and prepared is key. If you have any questions about how the shifting economic landscape could impact your financial future, we’re here to help. Let’s work together to keep your investments on track.
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