The US markets concluded 2024 with exceptional gains, achieving a rare feat that has only occurred three times in modern history. Despite the decline in December, the past year was extraordinary for investors.
Exceptional Performance of the S&P 500
Despite the downturn in the final days of 2024, the S&P 500 index recorded an increase of nearly 24% this year, similar to last year’s performance, marking its best performance since 1997 and 1998. This rare performance reflects increased investor confidence and is considered an exceptional event in the US markets.
Wall Street Outperforms Global Markets
Wall Street saw strong performance in 2024, outperforming European and Asian stock markets. Slowing inflation and increased consumer spending continued to drive the US markets towards further gains, alongside slower labor market growth.
2025 Outlook: Will the Gains Continue?
Major banks expect growth to continue in 2025, but there are concerns about rising geopolitical risks and the pace of interest rate cuts. Despite the optimism, some analysts warn that stocks may be overvalued.
Tech Companies Dominate the Gains
Shares of major tech companies like Apple, Microsoft, and Nvidia led the gains, contributing more than 50% of the S&P 500 returns. However, most companies in the S&P 500 saw their shares decline in the second half of the year, while some large-cap stocks benefited.
Shifts in Other Markets
The US markets were not alone in their boom, as Bitcoin saw a massive increase of around 120%, while gold rose by 26%. Commodities like cocoa also achieved huge gains of 200% this year, reflecting climatic impacts on global production.
Conclusion
As we approach 2025, the question remains: Can the US markets maintain this momentum amid increasing economic and geopolitical challenges?