US stocks closed lower on Tuesday, marking the end of a booming year for equity investors. The S&P 500 dipped 0.2%, while the Nasdaq Composite fell nearly 5%. The Dow Jones Industrial Average remained relatively flat. Despite year-end losses, the S&P 500 gained 23% for the year, building on last year’s 24.2% increase, marking the best two-year performance since the late 1990s. The Nasdaq outperformed with a 29% annual gain, while the Dow rose 13%.

Major drivers of 2024’s rally included optimism over Federal Reserve rate cuts, economic resilience, and advances in artificial intelligence. Market enthusiasm surrounding AI boosted stocks like Nvidia, which surged 172%, and Apple, which rose 30%.

The Federal Reserve’s decision to cut its benchmark interest rate by 1% since September supported market confidence, despite rising concerns about inflation and a slowdown in rate cuts signaled by Chair Jerome Powell. Treasury yields rose slightly on Tuesday but remained well-behaved throughout the year, contributing to overall investor confidence.

In fixed-income markets, the Bloomberg US Aggregate Bond Index gained modestly by 1.5%, while commodities saw mixed performance. Gold achieved its best year since 2010, and cocoa prices soared 178% due to market volatility and supply concerns. Oil prices ended the year flat, with a global surplus anticipated in 2025.