Wall Street Volatility Marks Year-End as Markets Brace for 2025

Wall Street ended the week with sharp profit-taking amidst thin trading, as the U.S. dollar poised for a 7% annual gain despite recent losses. Market optimism over potential Trump administration policies was tempered by expected caution from the Federal Reserve on further rate cuts.

Wall Street experienced significant profit-taking in the final days of 2024, dragging major indexes down as investors navigated thin holiday trading volumes. The U.S. dollar, though modestly down on Friday, looked set for a robust 7% annual increase, reflecting optimism around potential growth-enhancing measures from the incoming Trump administration.

Despite a strong start to the week, tech-heavy stocks like Tesla, Amazon, Microsoft, and Nvidia led declines as the S&P 500 fell 1.11%, the Nasdaq Composite dropped 1.49%, and the Dow Jones Industrial Average slipped by 0.77% on the day. Analysts pointed to pension fund reallocations as a possible cause of the sell-off amid low trading volumes.

In the broader financial landscape, U.S. Treasury yields climbed, reflecting elevated rate expectations. Meanwhile, the yen remained under pressure, and gold prices dipped despite a stellar year. Looking ahead, markets will watch the pace of rate cuts and fiscal policy changes, particularly in the U.S., for cues on global economic trends.

(With inputs from agencies.)