U.S. Stock Markets Close Worst Year in a Decade

The U.S. stock markets managed to end the year with a rollercoaster run, leading to a winter flurry of headlines. Following the worst Christmas Eve trading session ever — that resulted in the Dow Jones Industrial Average losing more than 650 points and brought the S&P 500 into a bear market — the post-Christmas trading day brought a largest single-day point gain in history. Since then stocks have continued to rally, yet 2018 closed as the markets’ worst year in a decade.

As Yahoo Finance reports, the S&P 500 closed out the year 6.2% lower than it started 2018. Similarly the Dow lost 5.6% over the course of the year while the Nasdaq was off 3.9% as the closing bell rang yesterday. These declines amounted to the worst loses the markets have seen since 2008. That said, loses during that tumultuous time 10 years ago were far more dramatic. Yahoo recalls that, at the end of 2008, the S&P 500 had lost 38.5%, the Dow was off 33.8% and the Nasdaq had slid a whopping 40%.

December’s volatile conclusion capped off a raucous year for the U.S. markets. Boosted by strong corporate earnings and expected impacts of the Tax Cuts and Jobs Act but hindered by rising interest rate worries and trade war concerns, the markets often seemed at odds with themselves. It’s been said many times before that markets hate uncertainty yet that’s mostly what they got throughout 2018. Moreover the uncertainty doesn’t show signs of easing up as the Federal government is currently engaged in a partial shutdown, Democrats will be taking over the House of Representatives on Thursday to make up a divided Congress, and — although the two nations are currently in a “ceasefire” — it’s unclear that the United States’ trade war with China is over just yet.  On the bright side the administration did manage to arrange the United States-Mexico-Canada Agreement to replace NAFTA (although the new pact has not yet been ratified) and the Federal Reserve recently indicated that it is projecting fewer rate hikes this year than previously expected.

At one point last year it seemed as though 2018 was headed for another blockbuster year. Alas, whether you attribute it to the markets running out of steam or pesky political uncertainty wreaking havoc, many indexes gave back their yearly gains and then some in the last quarter of year. So what does this tell us about what’s ahead for 2019? Probably that it’d be foolish to even try and guess  — but we can always hope for the best.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...