Tuesday Markets: Stocks End 2024 Strong, AI Prices Drop, Gas Surges

As 2024 comes to a close, Wall Street ends the year on a high note despite a rocky final week. Major indexes slipped about 1% Monday, reflecting thin holiday trading, but the overall annual performance remains strong. The Dow Jones Industrial Average is up 13%, the S&P 500 gained 24%, and the Nasdaq Composite surged 30%.

Natural Gas Prices Surge on Cold Weather Forecast

Natural gas futures soared on Monday, hitting a 52-week high. February contracts rose more than 15% after forecasts pointed to an unusually cold January in the eastern U.S. and around the Great Lakes.

A report from The Weather Co. and Atmospheric G2 suggests polar vortex conditions. This spike in gas prices reflects rising demand for heating fuel. Investors in energy commodities and related sectors may find opportunities amid these seasonal trends.

Commodities prices >>

Boeing Faces Scrutiny After Crash

A tragic aviation incident over the weekend brought renewed attention to Boeing (NYSE:BA). The crash of a 737-800 in South Korea has raised questions about the model, which is one of the world’s most widely used aircraft. Cirium data shows that 17% of all commercial passenger jets in service are 737-800s.

Despite the tragedy, experts note that the aircraft’s strong safety record and average age of 13 years make a design flaw unlikely. For Boeing investors, the incident could lead to short-term volatility, but the long-term impact appears limited.

Alibaba Slashes AI Costs in Competitive Push

Chinese tech giant Alibaba (NYSE:BABA) has announced major price cuts on its large language models (LLMs), offering reductions of up to 85%. The cuts apply to Qwen-VL, a model that integrates text and image understanding.

This move highlights intensifying competition among China’s major technology firms. Companies like Tencent (NYSE:TME), Baidu (NASDAQ:BIDU), and Bytedance are vying for dominance in the burgeoning AI sector.

Alibaba Cloud, the company’s cloud computing arm, is positioning its AI tools for enterprise clients rather than consumers. With over 90,000 businesses already using its Qwen models, Alibaba is focusing on scaling adoption and reducing barriers to entry.

Earlier in 2024, Alibaba implemented other significant price cuts on core cloud products and AI models, signaling a long-term strategy of undercutting rivals to gain market share.

The race to develop and commercialize generative AI tools presents significant opportunities for investors. Large language models, or LLMs, serve as the backbone of cutting-edge AI applications, including chatbots and content generation tools.

While companies like OpenAI target consumers, Alibaba’s focus on enterprise solutions differentiates its strategy. By prioritizing affordability and functionality, Alibaba is carving out a niche in the competitive AI space.

As the year ends, investors should remain focused on trends that balance innovation with stability. Tech, energy, and AI are poised to drive momentum into 2025.