Dow Marks Biggest Blown Gain Since September as Stocks End Mixed

The Dow Jones Industrial Average (DJIA) marked its biggest blown gain since September on Tuesday, as stocks ended the day mixed. The DJIA closed down 5.3% for the month, with the index closing at 42,544.22. The S&P 500 and Nasdaq Composite also closed lower, down 2.5% and 0.5% respectively.

The Dow's decline in the fourth quarter was driven by several key factors. Interest rate hikes by the Federal Reserve increased borrowing costs for companies and consumers, leading to a slowdown in economic growth and a decrease in corporate earnings. Geopolitical uncertainty, particularly the ongoing trade war between the United States and China, also contributed to market volatility and a decline in investor confidence. Additionally, the global economy experienced a slowdown in growth, which led to a decrease in corporate earnings and a decline in stock prices. Certain sectors, such as energy and financials, experienced significant declines in the fourth quarter, further impacting the Dow's performance.

Geopolitical events also played a significant role in the Dow's performance during this period. The election of President-elect Donald Trump in November 2024 led to a sharp rally in stocks, particularly bank stocks. JPMorgan and Goldman Sachs closed up about 41% and 48%, respectively, year to date, as traders cheered the prospect of lower taxes and a looser regulatory approach under a Republican administration. Additionally, Tesla shares finished the year up more than 62% due to the close alliance between its CEO, Elon Musk, and Trump. This event demonstrates how geopolitical events, such as changes in leadership, can impact the stock market and the Dow's performance.

Despite the Dow's significant decline in the fourth quarter, some experts remain optimistic about the stock market's prospects in the coming year. Almost all of Wall Street expects a double-digit return for the S&P 500 this year, with nobody expressing a bearish stance. This optimism is driven by factors such as the strong performance of technology stocks, which have been boosted by enthusiasm for rate cuts, economic strength, and artificial intelligence. Additionally, the Federal Reserve's aggressive interest rate cuts have bolstered confidence that the U.S. economy can sustain its recent growth.



In conclusion, the Dow's significant decline in the fourth quarter of 2024 was driven by a combination of factors, including interest rate hikes, geopolitical uncertainty, economic slowdown, and sector-specific factors. Despite this decline, some experts remain optimistic about the stock market's prospects in the coming year, citing factors such as the strong performance of technology stocks and the Federal Reserve's aggressive interest rate cuts. As investors look ahead to 2025, they will need to closely monitor the performance of individual sectors within the Dow, as well as geopolitical events, to make informed investment decisions.