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**, dragged down by a slump in tech stocks. However, the market still posted strong weekly gains, with the **Nasdaq and Dow Jones Industrial Average also rising** following former President Donald Trump’s return to the White House.

This article breaks down:

- The historical context of market reactions to political changes

- Public opinion on Trump’s economic policies

- Counterarguments from skeptics

- What this means for investors and the economy

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## **1. Historical Background: How Politics and Markets Interact**

Stock markets have always reacted to political shifts, especially during U.S. presidential transitions. Here’s a quick look at past trends:

- **2016 (Trump’s First Election):** Markets surged on hopes of tax cuts and deregulation. The **Dow hit record highs** in early 2017.

- **2020 (Biden’s Election):** Tech stocks soared due to low interest rates, but inflation fears later caused volatility.

- **2024 (Trump’s Return):** Investors expected pro-business policies, leading to a rally in financial and energy stocks.

**Why This Matters:**

- Markets often rise on optimism before policies take effect.

- Tech stocks are sensitive to interest rates and regulations—any hint of stricter rules can cause sell-offs.

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## **2. Public Opinion: Why Are Markets Rising?**

Many investors and analysts believe Trump’s policies could boost the economy. Here’s what people are saying:

### **Bullish Views (Optimistic Investors)**

- **Tax Cuts Expected:** Trump has signaled another round of corporate tax reductions, which could lift profits.

- **Deregulation Hopes:** Tech and energy sectors may face fewer restrictions, helping growth.

- **Stronger Economy:** Some believe Trump’s focus on U.S. manufacturing and trade deals will stabilize markets.

### **Bearish Views (Cautious Investors)**

- **Trade War Risks:** Trump’s past tariffs hurt some industries—could history repeat?

- **Inflation Concerns:** If growth speeds up too much, the Fed may hike interest rates, hurting stocks.

- **Tech Uncertainty:** Big Tech faced scrutiny under Trump before—will it happen again?

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

Not everyone agrees that Trump’s return guarantees a strong market. Critics point out:

- **Short-Term vs. Long-Term Gains:** Markets often rally on election hype but slow down once policies kick in.

- **Political Uncertainty:** A divided Congress could block major reforms, leading to stagnation.

- **Tech Slump Warning:** If regulations tighten (like antitrust laws), giants like Apple and Google could struggle.

**Example:** In 2017, Trump’s tax cuts boosted stocks, but by 2018, trade wars caused volatility.

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

### **Potential Outcomes:**

- **Continued Rally:** If Trump delivers on tax cuts and deregulation, stocks (especially banks and energy) could keep rising.

- **Tech Volatility:** Stricter rules or higher rates may keep pressure on tech stocks.

- **Global Impact:** Trade policies could affect international markets—investors should watch China and Europe.

### **Lessons Learned:**

- **Don’t Overreact to Short-Term Moves:** Markets often swing on news but stabilize over time.

- **Diversify:** A mix of tech, energy, and financial stocks can reduce risk.

- **Watch the Fed:** Interest rate decisions will still drive market trends.

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## **Final Thoughts**

While the **S&P 500 dipped slightly on tech weakness**, the overall market remains strong. Trump’s return has brought optimism, but risks remain. Investors should stay informed, avoid panic selling, and focus on long-term strategies.

**Key Takeaways:**

✅ Markets rose on Trump’s election but tech struggled.

✅ Optimism centers on tax cuts and deregulation.

✅ Risks include trade wars and tech regulations.

✅ Stay diversified and watch Fed policy moves.

What do you think? Will the rally continue, or is a correction coming? Let us know your thoughts! 🚀📉