2024 U.S. Equity Market Recap and 2025 Outlook

2024 was marked by resilience in the U.S. economy and strong performance in the stock market despite continued geopolitical tensions, policy uncertainties, and fluctuating inflation. Real Gross Domestic Product (GDP) grew at a solid 3.1% annualized rate in the third quarter, underpinned by robust consumer spending, which benefited from rising household wealth and steady real wage gains. Inflation moderated over the year, with headline CPI declining from 3.3% to 2.7% by November, allowing the Federal Reserve to initiate a long-awaited easing cycle with 100 basis points of rate cuts. However, the pace of disinflation slowed in the latter part of the year, highlighting persistent price pressures in sectors like shelter and auto insurance.