--- title: December 2024 Market Update | Sanderson Wealth Management description: The anticipated year-end rally failed to materialize as markets declined in December 2024, but the S&P 500 closed the year with a strong 25% annual gain. image: https://insights.sandersonllc.com/hubfs/December%202024%20MMU.png --- - [716.566.2420](tel:716-566-2420) - [Client Login](https://www.sandersonllc.com/client-login/) [![Sanderson Wealth Management](https://insights.sandersonllc.com/hubfs/Sanderson_October2019%20Theme/Images/sanderson-logo-stacked@2x.png)](https://www.sandersonllc.com/) - About - [Services](https://www.sandersonllc.com/services/) - [Our Team](https://www.sandersonllc.com/team/) - [John Sanderson](https://www.sandersonllc.com/team/john-sanderson/) - [Justin Sanderson](https://www.sandersonllc.com/team/justin-sanderson/) - [James Warner](https://www.sandersonllc.com/team/james-warner/) - [C. 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The S&P 500 declined by -2.4% for the month; however, it recorded an annual gain of 25%, which was primarily driven by large growth stocks. The index hit 57 new highs during the year, the fifth most ever. It also marked the first time in over 25 years that the S&P 500 gained more than 20% in back-to-back years. Small and mid-cap stocks which had been at the forefront of the post-election rally, encountered considerable headwinds in December. Mid-cap stocks, represented by the S&P 400, fell by -7.1% in December but ended the year up 13.9%. Small-cap stocks, tracked by the S&P 600, experienced a decline of 8.3% for the month, yet they still managed to gain 8.70% for the year. Despite the December dip, the overall market performance for 2024 was robust, driven by enthusiasm for rate cuts, economic strength, and advancements in artificial intelligence. Internationally, developed markets continued to face challenges, down -2.3%, while emerging markets showed a slight decline of -0.1%. The global market was hampered by ongoing tariff discussions and a strengthening U.S. dollar. ## Economic Data The U.S. economy ended 2024 on a solid note. In December, the Q3 GDP was revised higher to reflect a growth rate of 3.1%, indicating stronger-than-expected economic activity. The labor market remained robust with an unemployment rate of 4.2% and the addition of 227,000 new jobs in December. However, inflationary pressures persisted, with the Consumer Price Index (CPI) rising to 2.7% year-over-year. This represents consecutive monthly increases in CPI. The Federal Reserve cut the federal funds rate by 25 basis points in December, bringing the target range to 4.25-4.50%. Fed Chair Jerome Powell emphasized a cautious approach moving forward, with fewer rate cuts anticipated in 2025. ## Fixed Income Performance Despite short term rates falling, longer-term rates continued to rise in December, with the 10-year U.S. Treasury yield jumping from 4.18% to 4.58%. For the year, it increased by 70 basis points from 3.88%. This rise pressured bond returns, leading to a -1.64% decline in the US bond market for December. However, despite the tough final month, the overall performance for the year was up 1.25%, breaking the consecutive negative annual returns for bonds experienced in 2022 and 2023. ## Looking Ahead December 2024 concluded a year of strong market performance despite a challenging final month. The U.S. stock market saw significant gains throughout the year, driven by large-cap growth stocks. As we move into 2025, investors will be closely watching the Federal Reserve’s policy decisions, inflation trends, and global economic and geopolitical developments.  ![Stock Summary 12.24](https://insights.sandersonllc.com/hs-fs/hubfs/Stock%20Summary%2012.24.png?width=800&height=386&name=Stock%20Summary%2012.24.png) ![Market Indicators 12.24](https://insights.sandersonllc.com/hs-fs/hubfs/Market%20Indicators%2012.24.png?width=800&height=425&name=Market%20Indicators%2012.24.png)   ## Disclosure © 2025 Sanderson Wealth Management LLC. This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting, or tax advice from their own counsel. All information discussed herein is current as of the date appearing in this material and is subject to change at any time without notice. Opinions expressed are those of the author, do not necessarily reflect the opinions of Sanderson Wealth Management, and are subject to change without notice. The information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed. ### Let’s talk about your future. 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