Stocks rise on final day of 2024, S&P 500 heads for second year in a row with 20% gain: Live updates

Stocks were slightly higher Tuesday, as investors look to wrap up another booming year that hoisted the S&P 500 to its second consecutive annual gain exceeding 20%, spurred by enthusiasm for rate cuts, economic strength and artificial intelligence.

The broad market index traded 0.3% higher, while the Nasdaq Composite added 0.2%. The Dow Jones Industrial Average advanced 141 points, or 0.3%.

The S&P 500 has surged 24% in 2024, building on a gain of 24.2% from last year. The two-year gain of around 54% is the best since the nearly 66% rally in 1997 and 1998.

Meanwhile, the Dow has added 13% in 2024, while the Nasdaq has outperformed with a 30% advance.

The enthusiasm surrounding AI and its potential productivity boost powered significant gains for the major averages throughout the year, pushing “Magnificent Seven” stocks such AI chip darling Nvidia and iPhone giant Apple to new highs. The megacap technology gains helped lift the major averages to record levels.

Developments in Washington, D.C., helped fuel the rally in the second half of the year. The Federal Reserve has cut its benchmark interest rate by a full percentage point since September, bolstering confidence that the U.S. economy can sustain its recent growth. Stocks also rallied sharply following President-elect Donald Trump’s win in November, as traders cheered the prospect of lower taxes and a looser regulatory approach under a Republican administration.

Bank stocks in particular were one group that surged after the election, with JPMorgan and Goldman Sachs now up about 42% and 49%, respectively, year to date. Shares of Tesla, whose CEO Elon Musk is a close ally of Trump, are now up 67% year to date.

Meanwhile, bitcoin has performed even better than the stock market, up 124% for the year and topping $100,000 for the first time.

The Nasdaq and S&P have surged 7.5% and 2.8%, respectively, this quarter and are both on pace for a fifth consecutive positive quarter for the first time since 2021. The Dow is up a mere 0.9% over the same period for its fourth positive quarter in five.

Despite the strong year-to-date performance, Wall Street is entering the final day of the year on sour note. December has been a weak stretch for equities as investors take profits in some of 2024’s biggest winners and fears mount over rising rates into year-end. The Dow is down 4.8%. The S&P is down 1.7%, while the Nasdaq is up 1.7%.

“It sort of makes sense, if you think about it,” Bespoke Investment Group co-founder Paul Hickey told CNBC’s “Closing Bell: Overtime” on Monday. “You go into the end of the year with market up a lot, you’re coming in with a new administration — so the uncertainty is going to be there. You can’t fault investors for ringing the register a little bit here.”

The loss in momentum has also dashed investor hopes for a Santa Claus rally, which occurs when the market rises during each of the five final trading days of a calendar year and the first two trading days of January. Instead, the S&P 500 has dropped at least 1% during each of the past two trading days.

The Dow finished Monday’s choppy trading session with a loss exceeding 418 points, or 0.97%. The S&P plunged 1.07%, while the Nasdaq shed 1.19%.

The market is closed on Wednesday for New Year’s Day.