U.S. stocks closed lower on Monday, as it appeared that Wall Street would end a strong year on a sour note. The Dow Jones Industrial Average fell by 418.48 points, or 0.97%, to 42,573.73. The S&P 500 dropped by 63.90 points, or 1.07%, to 5,906.94. The Nasdaq Composite lost 235.25 points, or 1.19%, to 19,486.78.

All 11 major sectors of the S&P 500 finished in the red, with consumer discretionary and materials leading the decline, falling by 1.59% and 1.34%, respectively. Energy was the least affected, falling by 0.08%.

The "Santa Claus rally," typically encompassing the last five trading days of the year and the first two days of the new year, historically averages a gain of 1.3%, according to historical data. However, this year's weaker performance reflects broader market uncertainties, including rising yields on U.S. Treasury bonds and concerns about the Federal Reserve's interest rate policy heading into 2025. Over the seven trading days beginning December 24th, the S&P 500 has fallen by nearly 1%, deviating from its usual upward trend.

As the markets prepare to close out 2024, U.S. stocks have been weighed down by declines in major technology companies, such as Apple and Microsoft. Boeing has also faced pressure following a tragic incident involving one of its aircraft that veered off the runway in South Korea. Concerns about production, supply chain issues, and strikes have caused Boeing's stock to fall by more than 30% this year.

Despite the negative news, the strong performance of the stock market this year has provided ample opportunities for investors to realize gains. The S&P 500 has risen by an impressive 24%, making it the best annual performance since 2021. Meanwhile, the technology-heavy Nasdaq Composite has outperformed the broader market, rising by 30% year-to-date, driven by increased demand for technology stocks, particularly those benefiting from advancements in artificial intelligence and cloud computing.

Citi U.S. equity strategist Scott Chronert wrote in a recent note to clients that the "fundamentals" that have driven the market rally remain intact. "If the fundamental story holds, we would be buyers of pullbacks in the first half of the year on the S&P 500," Chronert wrote.

Xinhua/ gnews.cz - RoZ

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