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    S&P 500 achieves best performance since 1998

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    Best Performance


    The US stock market achieved a remarkable feat in 2024, with the S&P 500 gaining more than 23% following a 24% rise in 2023. This back-to-back gain of over 20% is the best performance for the benchmark index since 1997 and 1998. Such consecutive strong performances have only occurred a few times across the 20th century.

    The stellar gains in 2024 came despite missing the traditional year-end “Santa Claus rally.” Factors contributing to the year’s performance included eased inflation, robust consumer spending, and a solid job market. Investors bullishly drove stocks higher on strong earnings growth for tech companies. The blue-chip Dow index rose by 12.9% this year, while the tech-centered Nasdaq index saw a 28.6% rise.

    The S&P 500 is up around 53% over the past two years after poor performance in 2022. US markets outperformed their European and Asian counterparts due to favorable economic conditions.

    Terry Sandven, chief equity strategist at US Bank Wealth Management, said, “Inflation is waning, interest-rate cuts are in motion, and earnings are trending higher, all which bolster sentiment and provide valuation support.

    The consensus among major banks and research analysts is continued growth into 2025, driven by strong economic data and earnings growth.

    S&P 500’s exceptional consecutive gains

    However, some analysts warn of potential overvaluation and risks from the Federal Reserve’s future rate cuts. Tech companies significantly drove the S&P 500’s gains, with the “Magnificent Seven” — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — accounting for over 50% of the index’s total returns.

    Nvidia was a standout performer, surging 179%. The Dow Jones Industrial Average outperformed many expectations, peaking at a record above 45,000 points in December. The Nasdaq surged by 28.6%, led by strong confidence in tech and AI sectors.

    Bitcoin experienced a notable year, surging about 120% across 2024, driven by mainstream acceptance and political support from the Trump administration. Gold also saw a strong year, rising by 27% as investors looked for a safe haven amid economic uncertainty. Commodities had a surprising year, with cocoa futures on the New York exchange surging more than 168% due to climate issues disrupting harvests in major producing countries.

    This squeeze on supply triggered significant futures price increases, alongside other agricultural commodities like orange juice. This article highlights a notable year for US stocks, presenting an optimistic outlook for the future, albeit with caution for potential challenges.





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