Canada's main stock index suffered a broad-based pullback on the final Monday of 2024, while U.S. markets also fell.
The S&P/TSX composite index was down 175.81 points at 24,620.59.
In New York, the Dow Jones industrial average was down 418.48 points at 42,573.73. The S&P 500 index was down 63.90 points at 5,906.94, while the Nasdaq composite was down 235.25 points at 19,486.79.
The retreat was not unexpected, said Brianne Gardner, wealth manager and financial advisor with Velocity Investment Partners at Raymond James Ltd.
Markets had surged in the run-up to Christmas – a textbook “Santa Claus rally” – so some degree of correction was likely, she said.
“It wouldn't surprise us if we did see the markets kind of take a breather, take a pullback, even leading into 2025,” Gardner added.
“I think the end of the year, end of this week, might be a little bit more volatile as well.”
On the TSX, the biggest losses were sustained in the tech and materials sectors. Only the energy sector finished the day in positive territory Monday, helped along by benchmark oil prices that ticked higher in part due to last week’s news of larger-than-expected drawdowns of U.S. crude stocks.
Monday's market weakness came on the second-last day of trading in what was an extremely strong year for financial markets. In 2024, North American benchmark indexes saw gains across the board, with some — including the S&P/TSX composite index — hitting all-time highs during the year.
Gardner said in spite of the end-of-year pullback, investor sentiment remains high heading into 2025.
"I think we're seeing a lot of the positive trends carry over from 2024. We're seeing interest rates being cut across the board both in Canada and the U.S., and we also have those U.S. election results in, which is igniting pro-growth policy expectations into 2025," she said.
"Again, this does kind of set the conditions for equity prices to move higher."
Markets got a major boost in 2024 thanks to cooling inflation throughout the year, which led central banks in both the U.S. and Canada to cut interest rates. Lower interest rates ease borrowing costs for companies and fuel more economic growth.
South of the border, the U.S. Federal Reserve cut interest rates three times in 2024, but has signalled a more cautious approach heading into 2025 amid stubborn inflation and worries about it reheating.
In Canada, where economic growth has been slower than in the U.S., the central bank is likely to continue on its rate cut trajectory, Gardner said.
While interest rates took centre stage for much of 2024, investors at the end of the year are also watching closely for policy changes and economic implications related to next month's return of Donald Trump to the White House.
Many eyes will also be on corporate earnings when companies begin to file their fourth-quarter financial reports in the new year. Analysts expect strong earnings from U.S. corporate heavyweights, supported by that company's growing economy and strong consumer spending.
North American markets will be closed on Wednesday for the New Year holiday.
The Canadian dollar traded for 69.55 cents US compared with 69.37 cents US on Friday.
The February crude oil contract was up 39 cents at US$70.99 per barrel and the February natural gas contract was up 56 cents at US$3.94 per mmBTU.
The February gold contract was down US$13.80 at US$2,618.10 an ounce and the March copper contract was down three cents at US$4.09 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Dec. 30, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Amanda Stephenson, The Canadian Press