Since 1950, the yearly average for the S&P 500 has been a gain of 9.5%, achieving positive results 72% of the time.
Following a year with a 20% increase? The average rose to 10.6% with a success rate of 81.0%.
In cases of consecutive 20% years? The average soared to 20% with no declines.
🤔 pic.twitter.com/L1vM8wsBPb
— Ryan Detrick, CMT (@RyanDetrick) January 5, 2025
The stock market concluded an exceptional 2024, with the S&P 500 climbing more than 23% after a 24% rise in 2023. This achievement marks the highest performance for this benchmark index since the late 1990s, being only the fourth instance in history of back-to-back 20% gains. Retirement vehicles such as 401(k)s and pension plans frequently invest in indices like the S&P 500.
Consequently, account values see substantial increases during standout stock market years.
Stocks To Monitor | 📊Ready, set, trade! Keep these stocks on your radar as they energize the market #StockMarket pic.twitter.com/BgTydIF2z6
— ET NOW (@ETNOWlive) January 3, 2025
Despite a lackluster December with the Dow dropping about 5% and the S&P 500 sliding 2.5%, Wall Street enjoyed robust returns as inflation decreased and consumer spending remained strong. The job market also exhibited stability, albeit with signs of deceleration.
Investor optimism surged due to strong earnings in the tech sector, pushing stock prices higher, particularly in November. This year, the Dow increased by 12.9%, while the Nasdaq saw a jump of 28.6%. Over the last two years, the S&P 500 has risen approximately 53%, eclipsing stock performances in Europe and Asia.
The harsh reality of market conditions in numbers.
Last year:
73% of stocks trailed behind the S&P 500 (the worst underperformance since at least 2000)
Nearly 1/4 of the days saw the S&P 500 and its listed stocks moving in opposite directions
Yet, you couldn’t just sit there and lament about it. pic.twitter.com/YNtuHTykYv
— Callie Cox (@callieabost) January 3, 2025
Showcasing Significant Two-Year Profits
Terry Sandven, the chief equity strategist at US Bank Wealth Management, remarked, “With inflation fading, anticipated interest-rate cuts, and earnings on the rise, investor sentiment is strengthening and valuation support is being established.
However, certain analysts caution that stock valuations may be excessive, and there’s ongoing uncertainty surrounding potential rate cuts from the Federal Reserve and other economic influences. Jeffrey Buchbinder, LPL Financial’s chief equity strategist, stated, “We are optimistic about the likelihood of another successful year in 2025, particularly with a strong chance of economic growth and anticipated Fed rate cuts next year.”
“Yet, if inflation resurgence halts rate cuts or speculative moves become excessive, sustaining this bull market may face significant challenges in the coming year.”
The tech sector had a remarkable year, with the “Magnificent Seven” — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — contributing over 50% to the S&P 500’s overall returns. Nvidia stood out with a 179% price increase. US Treasuries experienced mixed trends, with the yield on the 10-year US Treasury note rising by over 15% throughout 2024, indicating expectations for future economic advancement and inflation.
Bitcoin experienced an impressive 120% increase during 2024, furthering its mainstream acceptance, particularly in light of Trump’s endorsement of cryptocurrencies. Additionally, gold had a strong showing, rising by 27%, surpassing the S&P 500, as it is often viewed as a refuge amid economic uncertainty and inflation. Cocoa futures on the New York exchange soared over 168% during the year, affected by climate-related harvest disruptions in Ghana and Ivory Coast, which produce more than 70% of global cocoa.
Looking forward to 2025, analysts and major banks foresee ongoing growth based on robust economic indicators, although caution is expressed regarding potential disruptions.
