What 2024’s Market Crash Means for 2025

The S&P 500 experienced a historically poor market close to 2024, according to Bespoke Investment Group, ending an otherwise strong year on a downbeat note.

U.S. stocks stumbled into 2025, with the S&P 500 SPX -0.22% slipping 0.2% during Thursday’s opening trading session of the new year. This followed a 2.6% decline from Christmas Eve to the end of 2024, marking “the worst year-end performance since at least 1952,” Bespoke noted in a Thursday report.

“December wasn’t kind to bulls,” the firm said, adding that “the last several days were bad to a historic degree.”

Despite the rough finish, Bespoke highlighted that it might not spell trouble for 2025. Historically, the S&P 500 often rebounds after year-end losses exceeding 1%, with January consistently ranking as one of its strongest months, according to Renaissance Macro Research. The firm’s data shows January’s average returns since 1928 have been among the highest of any month.

Investors are also watching for a potential “Santa Claus rally,” a seasonal trend where U.S. stocks typically rise during the last five trading days of the year and the first two of the new year. After the S&P 500 fell 1.6% during the final stretch of 2024, the rally’s prospects remain uncertain as the period extends through Friday.

On Thursday, broader market followed the S&P 500’s decline. The Nasdaq Composite COMP -0.16% dipped 0.2%, while the Dow Jones Industrial Average DJIA -0.36% fell 0.4%. Despite the late-year slump, the S&P 500 closed 2024 with an impressive 23.3% gain for the year.