The Dow Jones Industrial Average closed out October with a bit of a scare, but still maintained its impressive year-to-date gains. On October 31, 2024, the DJIA closed at 41,763.46, down 378.08 points or 0.90% for the day, in what could be described as more of a trick than a treat for investors.
Despite the Halloween dip, the blue-chip index has still managed to mimic 2023’s strong performance. As of the end of trading on October 31, 2024, the DJIA has posted a year-to-date increase of approximately 10.7%, compared to the 13.7% annual gain seen in 2023. This puts 2024 on pace with last year’s returns, even with the end-of-month hiccup.
The broader market also felt the chill of Hallows’ Eve, with the S&P 500 losing 1.86% to close at 5,705.45, and the tech-heavy Nasdaq Composite declining 2.76% to 18,095.15. The day’s losses were primarily driven by disappointing earnings reports from tech giants and concerns over rising costs in the AI sector. But looking at the bigger picture, the DJIA started the year at 37,715.04 and has gained 4,048.42 points in ten months.
The day’s trading session was influenced by a few factors that spooked investors. Megacap tech stocks cast a shadow over the market, with Yahoo! Finance reporting giants like Meta Platforms and Microsoft are seeing declines following their earnings reports, dragging down major indices. Both companies flagged that they will step up already high spending on AI infrastructure, raising concerns about pressure on profitability.
Economic data added to the cauldron of concerns, as the personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, showed core PCE rising 0.3% month-over-month, higher than the expected 0.2%, raising fears about persistent inflation.
Investors are also on edge, eagerly awaiting next week’s Federal Reserve policy meeting, with hopes for another interest rate cut being tempered by the latest inflation data. As if the economic landscape wasn’t scary enough, geopolitical tensions added another layer of uncertainty, with USA Today reporting North Korea test-fired what appeared to be an intercontinental ballistic missile sending shivers through the market.
Despite these challenges, the DJIA’s performance in 2024 continues to reflect strong investor confidence and economic optimism overall. However, as today’s trading reminds us, the market can be as unpredictable as a haunted house.
Investors should remain vigilant and diversified in their approach, especially given the index’s jagged ascent this year and the potential for increased volatility in the face of economic and political uncertainties. As we bid farewell to October and look ahead to the final two months of 2024, the question remains: Will the market continue to treat investors, or are there more tricks up its sleeve?