It is often said the stock market takes the staircase up and the elevator down. That has clearly been seen in the action over the last few trading days as the tariff news has served as a catalyst to the downside. The S&P 500 quickly approached what pundits describe as bear market territory when it gets to a 20% drop from its high. Is this long-running bull market coming to a close?
It feels like spring has sprung here in Kansas, but it appears no one has told the stock market. Just a month ago in my previous newsletter I showed how the S&P 500 had been in a sideways pattern since November and waiting for a break either up or down. Not long after, it broke down and has failed to muster any sustained bounce.
In my last newsletter in January, I highlighted how the S&P 500 had been moving in a back-and-forth action without much gain or loss. The sideways action continued for the most part in February as well. We reached an all-time high in the S&P at 6,147.43 this month, yet we are closing in on the end of the month and it currently sits about where it started the year at.
After a positive 2024 ended with a down December, the stock market has experienced back and forth action in the first couple of weeks of 2025. I think these up and down movements could become the norm for 2025 on a larger scale as the market digests the incoming administration and their policies, as well as Fed policy going forward.
As we roll into the last month of 2024, the stock market will look to close out a great year on a strong note. Now that we’re past the election from a few weeks ago, there’s been a sense of euphoria in parts of the market.
We are 3/4th of the way through 2024, and despite many things being thrown at it this year, the stock market has continued to trend higher. An old Wall Street saying that stocks climb a wall of worry definitely applies to 2024 so far. We’ve had a strange (putting it lightly) election season, higher interest rates for 2024 than expected, geopolitical tensions across the globe, and a weakening job market, just to name a few.