By the end of 2024, the US stock market seems to be showing some "fatigue". The year-end rally that investors were hoping for has not materialized, and market Analysts have even warned that further disappointment may be on the horizon as 2025 begins.

The US stocks achieved double-digit growth in 2024, but in the last few days of this year, the upward momentum has weakened. During a time when investors typically enjoy the year-end "Santa Claus" rally, the market has been struggling.$S&P 500 Index (.SPX.US)$Since last Thursday, it has fallen more than 2%, mainly driven by the sell-off of popular Technology stocks.

Renowned Technology Analyst and Managing Partner at Deepwater Asset Management, Gene Munster, recently stated, 'I believe this is just evidence of how tense the market is; ultimately, the market is looking for reasons for a pullback.'

Currently, there are no obvious catalysts causing Technology Stock investors to withdraw, but Munster points out that this month's optimistic sentiment in the market is increasingly under pressure. After the Federal Reserve hinted at a reduction in the pace of rate cuts next year, traders became 'panicked,' a stance that continues to test market confidence.

Due to inflation uncertainty propelling the Federal Reserve's hawkish shift, Munster advises investors to sell before next month's Consumer Price Index report. He noted that the inflation data on January 15 will come ahead of the Technology Companies' Earnings Reports.

Jeremy Siegel, a finance professor at the world-renowned Wharton School, also agrees with the aforementioned view that the US stock market may see a critical turning point in January.

He believes that as investors' optimism is challenged, January may witness a reversal in the stocks of the Magnificent 7. The market is expected to 'change direction' in 2025, rotating from Technology Stocks to Other Stocks, potentially leading to a decline in ROI.

I think there may be some disappointment. As time goes by, I believe the possibility of a correction next year is increasing, which means a 10% drop in the S&P 500 Index. I think the main driving force pushing the market up has already been digested.

However, this does not mean that US stocks will not continue to rise. According to Munster, the valuations of Technology stocks are still reasonable, "but investors should be prepared for more frequent corrections."

Of course, Wall Street is not short of "optimists." For example, Tom Lee, co-founder and research director of American investment institution Fundstrat Global Advisors, known as the "Wall Street Oracle," stated that even if the upcoming inflation report exacerbates market unease, the S&P 500 Index will still reach 7,000 points in the first half of 2025.

He mentioned in an interview, "I think since the FOMC made the interest rate decision on December 18,the Federal Open Market Committeeinvestors have been a bit nervous, worried that the Federal Reserve may not be as dovish as investors previously thought."

However, according to him, the Federal Reserve's change in attitude has not altered the fundamentals for 2025, and he mentioned expectations for improved CEO sentiment and pro-business policies of the Trump administration.

"I think one of the lessons of 2024 is that we have seen periods of market volatility and weakness. We know that when this happens, investors quickly turn bearish, but it turns out that these are all Buy opportunities," he added.

Editor/rice