Financial markets have recently seen a significant decline, with the S&P 500 down 3% since December 6, 2024, with many stocks being hit harder.
According to a report from U.S. Bank dated January 8, 2025, the S&P 500 has delivered total returns of over 25% for two consecutive years, with significant volatility in the fourth quarter of 2024. The Federal Reserve announced on December 18, 2024, that it would slow the pace of interest rate cuts through 2025, which has weighed on investor sentiment.
It is worth noting that market declines, known as “corrections,” are a natural part of market cycles. A “correction” is defined as a decline of 10% to 20% from a certain peak, while a decline of 5% to 10% is considered a “mild decline.”
Looking at current performance, the SPDR S&P 500 ETF Trust (SPY) is trading at $603.05, up 0.83% from its previous close.
Some analysts suggest that these declines could be an opportunity for investors to reevaluate their investment portfolios, emphasizing the importance of diversification and reviewing long-term investment goals. Markets are expected to continue to be volatile, so investors are advised to stay informed and make informed decisions based on their financial goals and risk tolerance.
