2024 was a remarkable year for investors. After an outstanding 26.29% return in 2023, the S&P 500 posted another strong performance in 2024, gaining 25.02%. While concerns over inflation and interest rate policy loomed at the beginning of the year, a resilient U.S. economy, advances in artificial intelligence (AI) and strong corporate earnings helped sustain investor confidence.
Equities: The S&P 500 gained 2.41% in Q4, ending the year on a high note. While the "Magnificent Seven" tech giants dominated early in the year, the rally broadened in Q4, supporting small- and mid-cap stocks.
Fixed income: Despite three Federal Reserve rate cuts in 2024, bond markets remained volatile. The Bloomberg US Aggregate declined 3.06% in Q4 as investors reassessed the pace of future cuts.
Global markets: European markets struggled due to rising populism and weak manufacturing performance. The MSCI EAFE Index fell 8.11% in Q4, while the S&P 500 rose 2.41% over the same period.
Geopolitical uncertainty: Ongoing conflicts, global supply chain concerns and a new U.S. presidential administration have created an uncertain investment climate in 2025.
Investors are cautiously optimistic about 2025. While the U.S. economy remains strong, valuations are historically high and geopolitical risks remain top of mind.
For a more detailed analysis of the Q4 2024 market trends and what to expect in 2025, download the full Q4 2024 Retirement Market Recap today.
Contact us with any questions about this Market Recap or how TruePlan can help enhance your organization's retirement offerings.
To learn more about what happened in the third quarter, read our Q3 2024 Retirement Market Recap. It focuses on how bond markets gained momentum alongside equities, helped by the Federal Reserve's decisive move to cut interest rates by 50 basis points.*
*These data were pulled using Morningstar Advisor Workstation.