Market Commentary: Q4 2024
With the New Year upon us, it’s an ideal time to reflect on the milestones of the past year and consider what lies ahead. Throughout 2024, we experienced a blend of unexpected developments and steady progress in the financial landscape. In this update, we’ll provide a concise overview of the key events that defined the year and share insights as we prepare for 2025.
Economic Resiliency
The US economy continues to surpass expectations of a slowdown in recent years, with 2024 proving no exception. Stocks navigated challenges like interest rate changes, U.S. election uncertainty, and geopolitical conflicts, with the S&P 500 gaining over 20% for the second consecutive year—a first since 1998–1999. While there were some downturns, markets recovered quickly.
Advances in the US and other developed markets led to positive returns globally, as the Index Return Recap exhibit below illustrates, although emerging markets lagged developed markets. In the fall, the U.S. Federal Reserve reduced interest rates three times, boosting bond prices overall, though U.S. Treasury prices were mixed. The 10-year yield rose above 4.5%, reflecting shifts in the bond market.
Chart 1: MSCI All Country World Index in 2025
Past performance does not guarantee future results. These headlines are not offered to explain market returns. Instead, they serve as a reminder that investors should view daily events from a long-term perspective and avoid making investment decisions based solely on the news.
The Federal Reserve & Interest Rates
The Fed lowered the federal-funds rate to the 4.25%–4.5% range after three rate cuts totaling a full percentage point in September, November, and December. These were the first rate cuts since March 2020, prompted by easing inflation and mixed job market signals. Inflation stayed near multiyear lows, with the November core consumer price index (excluding food and energy) showing prices rose 3.3% from a year earlier.
Presidential Election
Republicans secured the presidency and control of Congress in the U.S. elections. Regardless of which party is in power, history shows that markets tend to trend upward over time. While uncertainty about the future persists, investors can take comfort in knowing that markets have moved forward even during challenging times, like during 2020. Market prices consistently adjust to provide opportunities for positive returns, offering reasons for long-term optimism.
Market Summary
Quarter 4 & Year-to-Date 2024 Index Returns
Past performance does not guarantee future results.
Invest Where it Really Counts
As we step into the New Year, it’s natural to wonder how global policies, leadership changes, and evolving markets might shape the future. And those are just some questions about the year ahead of us. That’s why we believe you are best served planning for what could happen rather than trying to predict what will—by having a diversified portfolio that aligns with your goals and risk tolerance and staying committed to a long-term strategy.
At Petersen Hastings Wealth Advisors, our mission is to help you invest your time and energy where it truly matters—your family, your business, your legacy—where you’re invested. Thank you for trusting us to build a personalized plan that supports your vision for the future. We’re excited to continue serving you in 2025 and beyond.