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

# The Stock Market on January 24, 2025: A Day of Mixed Signals

**January 24, 2025**, was a notable day on Wall Street. The S&P 500, a key index tracking 500 of America's largest companies, closed slightly below its all-time high. This dip was largely due to a slump in big technology stocks. However, the broader story of the week was one of significant gains. All three major indexes—the S&P 500, the Nasdaq (heavy with tech stocks), and the Dow Jones (30 major industrial companies)—posted strong weekly advances.

This market activity unfolded in the early weeks following **Donald Trump's return to the White House** for a second non-consecutive term, a political event that investors were watching closely for its potential economic impact.

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### 1. Historical Background: From Booms to Political Swings

To understand this day, we need a bit of history. The stock market has long been sensitive to political changes, but the connection has become more pronounced in recent decades.

* **The Long View:** For over a century, the market's primary drivers have been corporate profits, interest rates, and economic growth. Presidents influence these factors through policies on taxes, regulation, and government spending.

* **The Recent Past (2016-2024):** The first Trump presidency (2017-2021) was marked by major corporate tax cuts and deregulation, which initially fueled a strong market rally. The Biden presidency (2021-2025) focused on large infrastructure spending and different regulatory approaches, with markets experiencing both highs and significant volatility due to inflation and rapid interest rate hikes.

* **The Evolution:** Over time, the market's reaction to elections has become more immediate and volatile, amplified by 24/7 news and social media. Investors now often make swift bets on how a new administration's stated policies might affect specific sectors, like energy, tech, or finance.

The week leading to January 24, 2025, was a modern example of this: markets quickly pricing in the expectations of a new political era.

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### 2. General Public Opinion: Cautious Optimism and Sector Bets

After the election result, a common view emerged among many investors and analysts:

* **Pro-Business Expectations:** Many believed a Trump administration would likely push for **lower taxes and reduced business regulations**, which could boost corporate profits. This fueled the strong weekly gain.

* **"Sector Rotation":** There was a noticeable shift in money. Investors moved some funds out of the previously high-flying **technology sector** (leading to the Jan. 24 slump) and into sectors expected to benefit more directly from the new policies, such as:

* **Energy** (expecting looser drilling and environmental rules).

* **Financials** (expecting lighter banking regulations).

* **Industrial and Defense** companies.

* **Short-Term Confidence:** The big weekly gain was widely interpreted as a sign of short-term market confidence in the economic direction of the new administration.

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### 3. Counterarguments: Reasons for Skepticism and the Tech Slump

Not everyone was buying the rally. Critics and cautious voices pointed out several reasons for concern, which also explained the day's tech weakness:

* **Uncertainty is the Enemy:** The core counterargument is that **promised policies are not the same as passed laws**. Political gridlock, legal challenges, or shifting priorities could delay or dilute proposed changes. The market might have gotten ahead of itself.

* **Trade and Tariff Fears:** A major theme of the previous Trump term was the use of tariffs (taxes on imports). Critics worried that a return to **trade wars** could disrupt supply chains, raise costs for companies and consumers, and hurt the global economy, ultimately hurting corporate profits.

* **Why Tech Slumped Specifically:** The January 24 decline in tech wasn't random. Tech giants thrive on **global supply chains and overseas sales**. Fears of renewed trade tensions and stricter immigration rules (affecting tech talent) made them vulnerable. Furthermore, if policies favored "old economy" sectors, money would naturally flow out of tech, at least temporarily.

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### 4. Implications: Lessons from the Week's Action

The events of the week ending January 24, 2025, offer clear lessons for observers and everyday investors:

* **The Market Anticipates:** Markets move on **expectations of the future**, not just current reality. The weekly gain was a bet on what *might* happen, not a reward for what *had* happened.

* **No Single Narrative Wins:** The day presented two truths: broad weekly optimism (the gain) and immediate sector-specific worry (the tech slump). This shows that markets are complex, and different groups of investors can have opposite views on the same news.

* **Volatility is the New Normal:** The rapid shift from a roaring weekly rally to a record-near slump in a single day signals that we should expect a **bumpy ride**. Political transitions, especially in a divided country, create uncertainty, and markets dislike uncertainty.

* **Lesson for Everyday People:** For most people saving for retirement, the key takeaway is to **avoid making drastic investment changes based on political headlines**. Long-term financial plans are built on diversification and time in the market, not on reacting to daily or weekly political swings. The day's mixed signals were a perfect reminder that timing the market based on news is incredibly difficult.

**In summary,** January 24, 2025, was a snapshot of a market in transition—celebrating potential new policies with a broad rally, but pausing to soberly assess the risks, one sector at a time. It underscored that while politics can move markets in the short term, the long-term health of investments still rests on the fundamental health of companies and the economy.