January 23, 2025

Market Review

U.S. equity indices generated modest returns in the fourth quarter of 2024, and closed out the full year with double digit returns for the second year in a row. A post-election rally pushed the large capitalization S&P 500 Index above 6,000 for the first time in early November and it reached an all-time high in early December. Small capitalization stocks as measured by the Russell 2000 Index traded above their all-time high of 2,442.74 (last reached in 2021) but failed to close above that level. Equities moved lower in December as concerns about the future direction of inflation and interest rates weighed on the outlook for stocks. Enthusiasm for all things related to Artificial Intelligence (AI) created what we believe to be a more speculative investing environment, which proved challenging for Conestoga’s investment strategies.