Wall Street Closes in Red as Investors Brace for Volatility in 2025

Wall Street ended Monday in negative territory, closing a year marked by strong returns, geopolitical tensions, and significant political events. Investors are cautious due to tax positioning, high valuations, and anticipated 2025 uncertainties. Despite recent downturns, 2024 saw substantial gains driven by technology and AI advancements.

Wall Street concluded its Monday session in negative territory amid light trading at the start of a holiday-shortened week, capping an eventful year where all three major indexes achieved robust double-digit gains.

Tax strategies for year-end, climbing Treasury yields, and uncertainties surrounding 2025 stirred a risk-off mood among investors. The indexes rebounded from early lows but closed down over 0.5%. Oliver Pursche of Wealthspire Advisors remarked on the over-50% rise in the S&P over two years, prompting investors to secure their gains given the thin market volume.

Despite recent dips, 2024 emerged as a stellar year for U.S. stocks, with the Nasdaq eyeing around a 30% annual gain, the S&P 500 set for a 24% rise, and the Dow over 13% above 2023 end levels. Sectors like technology and consumer discretionary soared, unlike materials, which lagged.

The year was fraught with geopolitical tensions and notable domestic political developments, including former President Trump's re-election. Nvidia's shares soared 180% as investors bet on AI's promise. Looking ahead, volatility is expected, particularly in early 2025. Lower taxes and a favorable regulatory scene might propel stocks beyond fair values.

Boeing shares dipped following South Korea's emergency inspection directive after a deadly air accident. Crypto stocks also slumped. A national mourning day for former President Jimmy Carter will see U.S. markets closed.

(With inputs from agencies.)