This Weekly Financial Markets Update reviews the top market headlines: U.S. Equities, International Equities, Fixed Income, Commodities

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2024 saw a wide dispersion of returns both across and within asset classes as investors reacted to multiple factors during the year, including resilient U.S. economic growth, improved corporate earnings, and central bank policy shifts.

U.S. Equities: Large-capitalization stocks once again led U.S. markets in 2024, as the S&P 500 index posted a 20%+ return for the second straight year. Growth stocks trounced value stocks (Russell 1000 Growth index, +33.4%; Russell 1000 Value index, +14.4%), keyed by the ongoing rally among the so-called "Magnificent Seven" technology stocks, which collectively rose nearly 50% on the year. Small-cap stocks recorded solid absolute returns (Russell 2000 Index, +11.5%) but trailed large-caps by a wide margin. Given these trends, the market became increasingly concentrated during the year, with the top 10-weighted stocks comprising nearly 40% of the S&P 500 by year-end.1

International Equities: International stock indices were limited to single digits in 2024 (MSCI ACWI ex USA index, +5.5%), as returns were curbed by U.S. dollar appreciation. Developed markets underperformed (MSCI EAFE index, +3.8%) as certain key regions faced economic growth challenges, while emerging markets saw stronger gains (MSCI Emerging Markets index, +7.5%). (All international stock index returns are quoted in U.S. dollar terms.)

Fixed Income: Broad bond market index returns were constrained in 2024 (Bloomberg U.S. Aggregate index, +1.3%). While short-term rates fell as the Federal Reserve began cutting its policy rate, yields on intermediate- and long-term Treasury bonds were volatile and ended the year at higher levels (producing price declines) amid solid U.S. economic growth and stubborn inflation trends.

Commodities: Commodities collectively delivered moderate results in 2024 (Bloomberg Commodity index, +5.4%). Oil prices remained relatively subdued throughout the year while gold surged to all-time highs.

As of December 31, 2024 Month-to-Date Quarter-to-Date One-Year
MSCI All Country World -2.37% -0.99% 17.49%
S&P 500 -2.38% 2.41% 25.02%
Russell 2000 -8.26% 0.33% 11.54%
MSCI EAFE -2.27% -8.11% 3.82%
MSCI Emerging Markets -0.14% -8.01% 7.50%
FTSE NAREIT Equity -7.38% -6.21% 8.73%
Bloomberg Commodity 1.02% -0.45% 5.38%
Barclays U.S. Aggregate -1.64% -3.06% 1.25%

Based on market capitalization. Data from Morningstar Direct and FactSet. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.