Stocks Rebound on Final Trading Day of 2024, Capping Off a Stellar Year

The stock market closed out the final trading day of 2024 on a positive note, with the Dow Jones Industrial Average (DJIA) rising 0.3%, the S&P 500 climbing 0.2%, and the tech-heavy Nasdaq Composite gaining 0.1% in morning trades. This rebound helped offset some of the losses from the previous trading session, where the S&P 500 and Nasdaq had both fallen more than 1% (Source: "Stock Market Today: Nvidia, Tesla Mixed"). The rally was also supported by the fact that the 10-year Treasury yield ticked lower to 4.52%, and oil prices held their recent gains, with West Texas Intermediate futures trading around $71.20 per barrel (Source: "Indexes Fall But Recover Off Lows; ServiceNow, Credo Tech, IBKR In Focus").

The rebound in stocks on the final trading day of the year capped off a stellar performance for the major indexes in 2024. The S&P 500 is set to gain more than 24% for the year, marking back-to-back years of over 20% gains, a feat that has only happened a handful of times in the modern-day version of the index (Source: CNN, "US stocks close out 2024 with strong gains despite December slump"). The Nasdaq Composite is on track for its longest quarterly winning streak since 2021, while the Dow Jones Industrial Average is up about 13% for the year (Source: CNN, "US stocks close out 2024 with strong gains despite December slump").

The strong performance of the major indexes in 2024 was driven by a combination of factors, including cooling inflation, declining yields on fixed-income instruments, aggressive monetary easing by the State Bank of Pakistan, and a stable rupee (Source: Dawn, "KSE-100 index closes 2024 with 84pc gain"). These improvements, coupled with political stability under the new IMF programme, bolstered investor confidence and contributed to the overall market rebound.

The "Magnificent Seven" tech stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—played a significant role in driving the market's rebound in 2024. These stocks accounted for over 50% of the S&P 500's total returns this year, according to data from S&P Dow Jones Indices. Since November 5, the Magnificent Seven stocks have accounted for over 96% of the S&P 500's gains (Source: CNN, "US stocks close out 2024 with strong gains despite December slump"). Nvidia (NVDA) stock was a top performer of the year, surging over 180% (Source: CNN, "US stocks close out 2024 with strong gains despite December slump").

The strong performance of the Magnificent Seven tech stocks, coupled with the broader market's rebound, contributed to an unprecedented 84% gain in the KSE-100 index in Pakistan during 2024. This made it the second-best performing market globally in US dollar terms, behind Argentina (Source: Dawn, "KSE-100 index closes 2024 with 84pc gain"). The KSE-100's stellar performance was powered by contributions from banks, fertilizers, and exploration and production stocks, which collectively accounted for 66% of the index's gains. Key performers included FFC, which added 6,086 points, Mari Petroleum (3,977 points), United Bank Limited (UBL) (3,957 points), and Oil & Gas Development Company (2,613 points) (Source: Dawn, "KSE-100 index closes 2024 with 84pc gain").

In conclusion, the stock market's rebound on the final trading day of 2024 capped off a stellar year for the major indexes, driven by a combination of factors and the strong performance of the Magnificent Seven tech stocks. The market's rebound contributed to an unprecedented 84% gain in the KSE-100 index in Pakistan, making it the second-best performing market globally in US dollar terms. As investors look ahead to 2025, they should remain cautious and prepared for potential volatility and corrections, while also considering the strong economic data, earnings growth, and expectations of a business-friendly Trump administration that analysts anticipate will drive continued growth in the coming year.