Stock Market on Jan. 24, 2025: S&P 500 ends below record high as tech slumps, but posts big weekly gain along with Nasdaq and Dow after Trump's return to White House - MarketWatch

# **Stock Market Update: Jan. 24, 2025 – S&P 500 Ends Below Record High as Tech Slumps, But Posts Big Weekly Gains**

On January 24, 2025, the **S&P 500** closed slightly below its all-time high as tech stocks struggled, but the market still posted strong weekly gains. The **Nasdaq** and **Dow Jones Industrial Average** also rose significantly, partly fueled by optimism after **Donald Trump’s return to the White House**.

Let’s break down what happened, why it matters, and what people are saying.

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## **1. Historical Background: How We Got Here**

- **The Bull Market of the 2020s**: Since the COVID-19 crash in 2020, stocks have mostly climbed, driven by tech giants, stimulus spending, and AI advancements.

- **Trump’s First Term (2017-2021)**: Markets surged due to tax cuts and deregulation, but trade wars and political uncertainty caused volatility.

- **Biden’s Term (2021-2025)**: Stocks rose but faced inflation, interest rate hikes, and a tech slowdown in 2023.

- **2024 Election Impact**: Trump’s victory brought expectations of business-friendly policies, boosting investor confidence.

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## **2. Public Opinion: Why Are Markets Reacting This Way?**

### **Optimistic Views**

- **Pro-Business Policies**: Investors expect tax cuts, deregulation, and stronger corporate profits under Trump.

- **Strong Weekly Gains**: Despite Friday’s dip, the S&P 500, Nasdaq, and Dow all rose over the week, showing resilience.

- **Tech Bounce-Back Potential**: Some believe the tech slump is temporary, with AI and semiconductors still driving long-term growth.

### **Cautious Views**

- **Tech Weakness**: Big names like Apple, Microsoft, and Nvidia dragged the market down, raising concerns about overvaluation.

- **Political Uncertainty**: Trump’s policies (trade wars, tariffs) could disrupt markets if tensions rise.

- **Inflation & Interest Rates**: If the Fed delays rate cuts, borrowing costs could hurt stocks.

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## **3. Counterarguments: Is the Rally Overhyped?**

### **Critics Say:**

- **Short-Term Hype**: Markets may be overreacting to Trump’s win without seeing real policy changes.

- **Tech Still Overpriced**: Even after the slump, some tech stocks trade at high price-to-earnings ratios.

- **Geopolitical Risks**: Trade wars with China or new regulations could hurt profits.

### **Supporters Argue:**

- **History Repeats Itself**: Trump’s first term saw strong markets; this could be a repeat.

- **Corporate Earnings Strong**: Many companies are still posting solid profits, justifying stock prices.

- **Fed Pivot Coming**: If interest rates drop later in 2025, stocks could keep rising.

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## **4. Implications: What Does This Mean for Investors?**

### **Potential Outcomes**

✅ **Continued Rally** – If Trump’s policies boost growth, stocks could set new records.

⚠️ **Volatility Ahead** – Political shifts, inflation, or tech struggles could bring swings.

📉 **Correction Risk** – If earnings weaken, a 10-20% market drop is possible.

### **Lessons Learned**

- **Don’t Time the Market** – Weekly gains show that short-term dips don’t always mean long-term losses.

- **Diversify** – Tech slumps, but other sectors (energy, finance) may rise.

- **Watch Policy Changes** – New tax laws or trade deals could shift market trends.

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### **Final Thoughts**

The market’s mixed performance on Jan. 24 reflects both hope and caution. While tech struggles, the broader market’s weekly gains suggest investors are betting on a strong 2025. However, risks remain—smart investors will stay diversified and watch for policy shifts.

Would you buy the dip or wait for more stability? Let us know in the comments! 🚀📉