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** also rose significantly, 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**

- **Post-Pandemic Recovery (2020-2024):**

- After the COVID-19 crash in 2020, markets rebounded sharply due to stimulus spending and low interest rates.

- Tech stocks (like Apple, Amazon, and Tesla) led the rally, pushing the **S&P 500 and Nasdaq to record highs**.

- Inflation surged in 2022-2023, forcing the **Federal Reserve to raise interest rates**, which hurt growth stocks.

- **2024 Election Impact:**

- Donald Trump’s victory in the 2024 election brought expectations of **tax cuts, deregulation, and pro-business policies**.

- Markets initially rallied on hopes of stronger economic growth.

- **January 2025 Volatility:**

- Tech stocks faced pressure due to **higher borrowing costs** and mixed earnings reports.

- However, the broader market (S&P 500, Dow) gained for the week as investors bet on a stronger economy.

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## **2. General Public Opinion: Why Are People Optimistic?**

Many investors and analysts believe:

✅ **Trump’s policies (tax cuts, deregulation) could boost corporate profits.**

✅ **The Fed may cut interest rates later in 2025 if inflation cools further.**

✅ **Strong job market and consumer spending support economic growth.**

However, some worry:

❌ **Tech stocks are still expensive and sensitive to interest rates.**

❌ **Geopolitical risks (trade wars, conflicts) could disrupt markets.**

❌ **If inflation stays high, the Fed might keep rates elevated, hurting stocks.**

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## **3. Counterarguments: Why Some Are Skeptical**

Not everyone is convinced the rally will last. Critics argue:

- **"Markets are overreacting to political changes."**

- Past rallies under Trump (2017-2019) were followed by volatility (2020 crash).

- Policy changes take time, and economic risks remain.

- **"Tech is still vulnerable."**

- Companies like Nvidia and Microsoft saw big drops this week.

- If earnings slow, their high valuations could collapse.

- **"The Fed isn’t guaranteed to cut rates."**

- If inflation bounces back, borrowing costs could stay high, hurting stocks.

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

### **Short-Term Outlook:**

📈 **Cyclical stocks (banks, industrials) could rise on economic optimism.**

📉 **Tech may stay volatile until interest rates decline.**

### **Long-Term Lessons:**

✔ **Political shifts impact markets, but fundamentals (earnings, jobs) matter more.**

✔ **Diversification helps—don’t bet everything on one sector.**

✔ **Stay cautious—bull markets don’t last forever.**

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### **Final Thoughts**

While the S&P 500 didn’t hit a new record on Jan. 24, the overall trend remains positive. Investors are hopeful about Trump’s economic policies but wary of tech’s struggles. The key takeaway? **Stay informed, diversify, and don’t panic over short-term swings.**

Would you buy stocks now or wait? Let us know in the comments! 🚀📉📈