It seems now Magento will only load from pub folder. By default it will not be possible to load it from the root of Magento.
So the best solution for this is to create a virtual host and point it to pub directory.
Meanwhile, as an alternative to run this on local machine I tried something else that seems to be working fine with the default setup. Like earlier we were using thebase_urlashttp://127.0.0.1/magento. So instead of this now we need to usehttp://127.0.0.1/magento/pubas thebase_url. Secure and Unsecure URL needs to be setup on the basis of this.
Setting this up will avoid the issue of 404 page coming.
Note: Verified this with the default Magento only. Not sure for the projects having much complex functionalities. But you can give this a try.