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 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 U.S. stock market had a mixed day:

- **S&P 500** dipped slightly, ending just below its record high.

- **Tech stocks slumped**, dragging down the Nasdaq.

- Despite the daily drop, all three major indexes (**Dow, S&P 500, Nasdaq**) posted strong weekly gains.

The rally was fueled by optimism after **Donald Trump’s return to the White House**, with investors betting on pro-business policies.

---

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

### **The Trump Effect on Markets**

- During Trump’s first term (2017-2021), markets surged due to **tax cuts, deregulation, and strong corporate earnings**.

- After Biden’s presidency (2021-2025), markets faced **high inflation, rising interest rates, and tech sector struggles**.

- Trump’s re-election in 2024 reignited hopes for **lower taxes, reduced regulations, and a stronger economy**.

### **Tech Sector Volatility**

- Tech stocks (like Apple, Amazon, Tesla) have been **boom-and-bust** in recent years.

- In 2022-2023, rising interest rates hurt growth stocks.

- By late 2024, tech rebounded on **AI advancements and strong earnings**, but January 2025 saw profit-taking.

---

## **Public Opinion: What People Are Saying**

### **Optimistic Investors**

- Many believe Trump’s policies will **boost corporate profits and stock prices**.

- Some expect **tax cuts for businesses**, leading to higher stock buybacks and dividends.

- Others think **deregulation** will help sectors like energy and finance.

### **Skeptics and Critics**

- Some worry about **trade wars** (like those seen in Trump’s first term).

- Others fear **inflation could return** if stimulus policies overheat the economy.

- A few analysts warn that **tech stocks are still overvalued** and due for a bigger correction.

---

## **Counterarguments: Why Some Doubt the Rally**

### **1. Markets Don’t Always Follow Politics**

- While Trump’s policies helped stocks before, **global factors (like China’s economy, oil prices) matter too**.

- If the Fed keeps interest rates high, growth stocks could keep struggling.

### **2. Tech’s Long-Term Risks**

- Big Tech relies on **consumer spending and innovation**—any slowdown could hurt earnings.

- AI hype may fade if companies don’t deliver real profits.

### **3. Political Uncertainty**

- Trump’s policies could face **legal challenges or opposition in Congress**.

- Geopolitical tensions (U.S.-China relations, Middle East conflicts) could disrupt markets.

---

## **Implications: What This Means for the Future**

### **Short-Term Outlook**

- Stocks may keep rising if **corporate earnings stay strong**.

- Tech could rebound if investors see **cheaper valuations**.

### **Long-Term Risks**

- If inflation spikes again, the Fed may **hike rates**, hurting stocks.

- A **U.S. recession** (if growth slows) could lead to a market drop.

### **Lessons Learned**

- **Markets react quickly to political changes**, but fundamentals (earnings, interest rates) matter more in the long run.

- **Diversification is key**—relying too much on tech or politics can be risky.

---

## **Final Thoughts**

The January 24, 2025, market dip was just a **small pause in a bigger rally**. While Trump’s return boosted confidence, investors should watch:

- **Tech earnings** (are they still growing?)

- **Fed policy** (will rates stay high?)

- **Global risks** (trade wars, inflation, recessions)

For now, the trend is **positive**, but smart investors stay cautious.

---

*Sources: MarketWatch, Bloomberg, Federal Reserve data*

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