While the Nasdaq Composite jumped 33.4% and crossed 20,000 for the first time in December, the S&P 500 (GSPC) finished 2024 with a 27% gain. Though major events including economic statistics, business results, and policy changes might weigh on the markets, investors are hopeful seasonal momentum will carry into January. Traditionally, the "Santa Claus rally" fuels gains in the last five trading days of December and the first two of January. With the Nasdaq up 3.3% and the S&P rising 2.91% over the past four days, there are now expectations of ongoing momentum. Still, a major player in the market sentiment is Tesla (TSLA, Financial) CEO Elon Musk.
Musk's connection with President-elect Donald Trump's desire to boost American manufacturing could have an impact on the trajectory of a variety of sectors. The first big test is on January 10; U.S. employment data offers insight into the state of the economy. LSEG projects profits per share growth of 10.6% for 2025, down from 12.16% for 2024. This will follow corporate earnings for Q4. The January 20 inauguration of Trump and expected executive actions on trade and energy policies could create volatility. Immigration policies and suggested tariffs could affect consumer pricing, corporate costs, and world trade dynamics. Trump's relationships with business leaders—including Musk, whose vision fits with important legislative initiatives—will be under close observation by investors.
